Date: 03.10.

2013

MBA-I (SEM I) Unit Test October 2013 Subject: (102) Economic Analysis for Business Decisions Marks: 30

Section-I is compulsory and each question carries ONE mark. Answer any ONE from Section-II

SECTION-I
Q.1. Select the group that best represents the basic factors of production. a. land, labor, capital, entrepreneurship b. land, labor, money, management skills c. land, natural resources, labor, capital d. land, labor, capital, technology Q.2. Scarcity is a condition that exists when a. there is a fixed supply of resources. b. there is a large demand for a product. c. resources are not able to meet the entire demand for a product. d. all of the above. Q.3. Managerial economics is best defined as a. the study of economics by managers. b. the study of the aggregate economic activity. c. the study of how managers make decisions about the use of scarce resources. d. all of the above are good definitions. Q.4. A company will strive to minimize a. transaction costs. b. costs of internal operations. c. total costs of transactions and internal operations combined. d. variable costs. Q.5. Company goals that are concerned with creating employee and customer satisfaction and maintaining a high degree of social responsibility are called ___________ objectives. a. social b. noneconomic c. welfare d. public relations Q.6. ______________ risk involves variation in returns due to the ups and downs of the economy, the industry and the firm. a. structural b. fluctuation c. business d. financial Q.7. A new taco-making machine that is similar in size and cost to hot dog carts has encouraged more street vendors to begin selling tacos. What short-run impact do you think this might have on the market for hot dogs? a. decrease in the demand for hot dogs b. increase in the demand for hot dogs c. decrease in the supply of hot dogs d. increase in the supply of hot dogs Q.8. Which of the following is not a non-price determinant of demand? a. tastes and preferences b. income c. technology d. future expectations Q.9. Which of the following is not a nonprice determinant of supply? a. costs b. technology c. income d. future expectations Q.10. Which of the following would cause a decrease in the demand for fish? a. the price of red meat increases. b. the price of fish increases. c. the price of chicken decreases. d. the number of fishing boats decreases. Q.14. Which of the following will not cause a short run shift in the supply curve? a. a change in the number of sellers b. a change in the cost of resources c. a change in the price of the product d. a change in future expectations Q.15. Which of the following refers to a shift in the demand curve? a. "This new advertising campaign should really increase our demand." b. "Let's drop our price to increase our demand." c. "We dare not raise our price because our demand will drop." d. "If new sellers enter the market, the demand for the product is bound to increase." Q.16. A decrease in the price of personal computers can result from a. a decrease in the price of chips. b. improvements in methods of assembling computers. c. an increase in the gross national product. d. both a. and b.

Q.17. Which of the following can result in an increase in the supply of residential housing in the short run?

a. a decrease in the price of lumber b. a decrease in real household incomes c. an increase in the wages of electricians d. none of the above Q.18. Which of the following is a key determinant of both supply and demand? a. income b. future expectations c. tastes and preferences d. sales tax 19. A market is in equilibrium when a. supply is equal to demand. b. the price is adjusting upward. c. the quantity supplied is equal to the quantity demanded. d. tastes and preference remain constant. Q.20. Which of the following indicates that there is a shortage in the market? a. demand is rising b. demand is falling c. price is rising d. price is falling Q.21. The sensitivity of the change in quantity demanded to a change in price is called a. income elasticity. b. cross-elasticity. c. price elasticity of demand. d. coefficient of elasticity. Q.22. The sensitivity of the change in quantity consumed of one product to a change in the price of a related product is called a. cross-elasticity. b. substitute elasticity. c. complementary elasticity. d. price elasticity of demand.

SECTION-II
Q.1. Explain the concept of Individual and Market Demand. What are the determinants of Market Demand? Q.2. What is Demand Forecasting? Explain various Opinion Polling Methods with their advantages & disadvantages.