In the name of ALLAH, the most beneficient, the most merciful

Managerial Economics (ECO404)

Multiple Choice Questions (MCQs)

 

Objective Questions

Question

Which of the following statements is TRUE?

  1. The sum of the coefficient of determination (R2) is the absolute value of the coefficient of correlation r
  2. The square root of the coefficient of determination (R2) is the absolute value of the coefficient of correlation r
  3. The difference of the coefficient of determination (R2) is the absolute value of the coefficient of correlation r
  4. None of the given statements is true

Answer: Chapter No.  

Question

Two products are said to be substitutes if cross price elasticity of demand between these two products is:

  1. Positive
  2. Negative
  3. Zero
  4. Infinite

Answer: Chapter No.  

Question

A function that relates inputs with outputs is called:

  1. Production function
  2. Consumption function
  3. Investment function
  4. Demand function

Answer: Chapter No.  

Question

Periods of economic expansion and contraction in an economy is named as:

  1. Business cycle
  2. Life cycle
  3. Poverty cycle
  4. Unemployment cycle

Answer: Chapter No.  

Question

To avoid the problem of bandwagon effect, ___________ method of forecasting is used.

  1. Personal insight
  2. Panel consensus
  3. Delphi
  4. Time series

Answer: Chapter No.  

Question

The quantity of a good or service that producers are willing and able to sell during a certain period of time is known as:

  1. Demand
  2. Supply
  3. Market demand
  4. Market supply

Answer: Chapter No.  

Question

The total cost (TC) function is given as: TC = 200 + 80Q. What is the variable cost?

  1. 80Q
  2. 200
  3. 350
  4. 200

Answer: Chapter No.  

Question

Y = a + bX + e In this regression equation, "X" is:

  1. Dependent variable
  2. Independent variable
  3. Slack variable
  4. Random variable

Answer: Chapter No.  

Question

Tax rates are determined by the government in:

  1. Fiscal policy
  2. Monetary policy
  3. Trade policy
  4. Exchange rate policy

Answer: Chapter No.  

Question

Fluctuations should be random. It is the requirement of which of the following technique(s)?

  1. Moving average technique only
  2. Exponential smoothing technique only
  3. Both moving average and exponential techniques
  4. Barometric technique

Answer: Chapter No.  

Question

Which of the following shows accounting profit of the firm?

  1. Total revenue + explicit or accounting costs of production
  2. Total revenue - explicit or accounting costs of production
  3. Total revenue / explicit or accounting costs of production
  4. Total revenue × explicit or accounting costs of production

Answer: Chapter No.  

Question

Consider the following equation of time series data: Yt = f (Tt, Ct, St, Rt) ________ shows trend component at time t.

  1. Tt
  2. Ct
  3. St
  4. Rt

Answer: Chapter No.  

Question

The Isoquants have a shape of curvature for the inputs which are:

  1. Perfect substitutes
  2. Imperfect substitutes
  3. Perfect compliments
  4. Imperfect compliments

Answer: Chapter No.  

Question

Both moving average and exponential techniques require:

  1. Random fluctuations
  2. Seasonal fluctuations
  3. Cyclical fluctuations
  4. No fluctuations

Answer: Chapter No.  

Question

Given the Cobb Douglas production function: Q = A La Kb There will be constant returns to scale if:

  1. a + b > 1
  2. a + b < 1
  3. a + b = 1
  4. a + b = 0

Answer: Chapter No.  

Question

When price of any commodity decreases, consumer’s purchasing power increases. This is known as:

  1. Income effect
  2. Price effect
  3. Substitution effect
  4. Real balance effect

Answer: Chapter No.  

Question

Which of the following is (are) the assumption of regression analysis?

  1. Homoscedasticity
  2. No autocorrelation
  3. No perfect multicollinearity
  4. All of the given options

Answer: Chapter No.  

Question

Which of the following is based on the data and equation?

  1. Qualitative forecasting
  2. Quantitative forecasting
  3. Regression analysis
  4. Time series analysis

Answer: Chapter No.