Tag: business economics and quantitative methods

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Questions Related to business economics and quantitative methods

Multiple choice business economics and quantitative methods equilibrium of a firm shifts in demand and supply producer's equilibrium income-output determination liquidity preference and profit
A produce strikes his equilibrium when the difference between $TR$ and $TC$ is maximised.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A producer strikes his equilibrium when he produces that amount of output at which the difference between total revenue and total cost is maximum. This is because, $\text{Net profit} = TR - TC$.

Multiple choice business economics and quantitative methods equilibrium of a firm shifts in demand and supply producer's equilibrium income-output determination liquidity preference and profit
The producer strikes his equilibrium only when $MP$ is diminishing.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A producer strikes his equilibrium only when $MP$ is diminishing, where the $MC$ is simultaneously rising. The producer stops production when rising $MC$ matches with falling $MR$. Beyond this point, rising $MC$ would exceed $MR$, causing loss of profit.

Multiple choice business economics and quantitative methods equilibrium of a firm shifts in demand and supply producer's equilibrium income-output determination liquidity preference and profit

In finding equilibrium position of a profit maximising firm, which technique is most convenient ___________.

  1. total revenue and total cost technique

  2. marginal revenue and marginal cost technique

  3. demand and supply technique

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The marginal approach (MR = MC) is considered most convenient because it focuses on the incremental changes in revenue and cost, allowing for precise determination of the optimal output level without needing to calculate total values for every possible quantity.

Multiple choice business economics and quantitative methods equilibrium of a firm shifts in demand and supply producer's equilibrium income-output determination liquidity preference and profit

A circumstance in which it might pay a monopolist to cut the price of his product is where _________.

  1. MC is falling

  2. MR is greater than MC

  3. his advertising costs are increasing

  4. average costs seem about to fall
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If MR > MC, the firm gains more revenue from selling an additional unit than it costs to produce it. By lowering the price to increase quantity sold, the firm can capture more of this potential profit.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

A change from $Rs.140 = 2$ pounds to $Rs. 60 = 1$ pounds indicates that Rs. is:

  1. Appreciating

  2. Depreciating

  3. Neither (a) nor (b)

  4. Either (a) or (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A change from RS 140 = 2 pounds to Rs 60 = 1 pounds indicates that rupees is appreciating. Appreciation of domestic currency is a situation of a fall in exchange rate. Less rupees are needed to buy one pound.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Appreciation of Indian rupees will occur when $Rs. 45$ have to be paid to exchange one $US $ $ instead of present rate of $Rs. 40/$ $. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In case of appreciation, lesser rupees have to be paid to exchange one US dollar, i.e. less than $Rs. 40/$ $

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Which of the following items raises the supply of foreign exchange?

  1. Import of goods from China

  2. Indian students going to USA for MBA
  3. Donation of 50 million $ $ $ received from Microsoft

  4. Purchase of land in England
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The supply of foreign exchange increases when foreign currency enters the domestic economy. Receiving a donation from abroad is an inflow of foreign currency, whereas imports, student expenses, and purchasing foreign assets are outflows that increase demand for foreign exchange.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Depreciation of domestic currency leads to rise in _____________.

  1. Exports

  2. Imports

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Currency depreciation makes domestic goods relatively cheaper for foreign buyers, which increases the demand for domestic products abroad, leading to a rise in exports.