A

Name.
RollNo..

Date:12/06/2012

Morning/EveningBatch

SHREEGURUKRIPASINSTITUTEOFMANAGEMENT

CPTMODELTEST9
SESSION2
ECONOMICS&QUANTITATIVEAPTITUDE
TotalMarks:100

TotalNo.ofQuestions:100

Time:2hours
No.ofPrintedpages:9


1.

Which of the following statements is incorrect?

(a) Unlike
normative
economics,
positive
economics is based on objective analysis of
economic issues.
(b) The opportunity cost of a good is the
quantity of other goods sacrificed to get
another unit of that good.
(c) Microeconomics emphasizes interactions in
the economy as a whole.
(d) None of the above.

2.

Which of the following is incorrect?

(a) The production possibilities frontier shows
the maximum combination of outputs that
the economy can produce using all the
resources available.
(b) Increasing opportunity cost implies a
production possibility frontier concave to the
origin.
(c) Free markets are the markets in which the
governments do not intervene.
(d) All of the above are correct.

3.

With the same amount of resources, a farmer

can feed the following combinations of goats and
horses:
Goats
Horses
Option I
168
44
Option II
150
50
Given the option available with him, what is the
opportunity cost to the farmer of feeding one
horse?
(a) 1 goat.
(b) 3 horses.
(c) 3 goats.
(d) 18 goats.

4.

A drought in India leads to unusually low level of

wheat production. This would lead to a rise in the
price of wheat and fall in the quantity of wheat
demanded due to:
(a) excess demand at the original price.
(b) excess supply at the original price.
(c) the supply curve shifting to the right.
(d) the demand curve shifting to the left.

5.

If the elasticity of demand for a commodity is

perfectly inelastic then which of the following is
incorrect?
(a) The commodity must be essential to those
who purchase it.
(b) The commodity must have many substitutes.
(c) The commodity will be purchased regardless
of increase in its price.
(d) The elasticity of demand for this commodity
must equal zero.

If a good has price elasticity greater than one

then:
(a) demand is unit elastic and a change in price
does not affect sellers revenue.
(b) demand is elastic and a change in price
causes sellers revenue to change in the
opposite direction.
(c) demand is inelastic and a change in price
causes sellers revenue to change in the
same direction.
(d) None of the above is correct.

7.

The law of diminishing returns implies that:

(a) for each extra unit of X consumed, holding
constant consumption of other goods, total
utility increases.
(b) total utility remains unchanged regardless of
how many units of X are consumed.
(c) marginal utility will increase at a constant
rate as more units of X are consumed.
(d) each extra unit of X consumed, holding
constant consumption of other goods, adds
successively less to total utility.

8.

Which of the following is correct?

(a) Firms that earn accounting profits are
economically profitable.
(b) Opportunity cost plus accounting cost equals
economic cost.
(c) When a firms demand curve slopes down
marginal revenue will rise as output rises.
(d) Firms increase profits by selling more output
than their rivals.

9.

You are given the following data:

Table 1
Output
Total Costs
0
0
1
15
2
28
3
38
4
46
5
54
The above data is an example of:
(a) decreasing returns to scale.
(b) constant returns to scale.
(c) increasing returns to scale.
(d) positive fixed costs.

10. Which of the following statements is incorrect?

(a) If marginal revenue exceeds marginal cost
the firm should increase output.
(b) If marginal cost exceeds marginal revenue
the firm should decrease output.
(c) Economic profits are maximized when total
costs are equal to total revenue.
(d) Profits are maximized when marginal
revenue equals marginal cost.
2

6.


11. Which of the following involve a trade-off?
(a) Taking a nap
(b) All of these answers involve trade-offs.
(c) Watching a football game on Saturday
afternoon
(d) Going to university

18. If an increase in the price of blue jeans leads to

an increase in the demand for tennis shoes, then
blue jeans and tennis shoes are _________.
(a) complements.
(b) inferior goods.
(c) normal goods.
(d) substitutes.

12. When some people in a society are unwilling to

work at the prevailing wage rate and there are
people who have income from property or some
other sources and need not work, such people
are:
(a) casually unemployed.
(b) chronically unemployed.
(c) voluntarily unemployed.
(d) disguisedly unemployed.

19. Consumer surplus is the area _________.

(a) below the demand curve and above the
price.
(b) above the supply curve and below the price.
(c) above the demand curve and below the
price.
(d) below the supply curve and above the price.
20. A rational person does not act unless _________.
(a) the action is ethical.
(b) the action produces marginal costs that
exceed marginal benefits.
(c) the action produces marginal benefits that
exceed marginal costs.
(d) the action makes money for the person.

13. If out of 100 people in the labour force, 92 are in

the work force, the number of people
unemployed is:
(a) 8
(b) 192
(c) 100
(d) 92

21. Suppose you find Rs 100. If you choose to use

Rs.100 to go to a football match, your
opportunity cost of going to the game is
_________.
(a) nothing, because you found the money.
(b) Rs. 100 (because you could have used Rs.
100 to buy other things) plus the value of
your time spent at the game.
(c) Rs. 100 (because you could have used the
Rs. 100 to buy other things) plus the value
of your time spent at the game, plus the cost
of the dinner you purchased at the game.
(d) Rs. 100 (because you could have used the
Rs.100 to buy other things).

14. NIXI stands for:

(a) National Internet Exchange of India.
(b) National International Exchange of India.
(c) National Institute of Exchange of Indian
goods.
(d) None of the above.
15. If demand for goods and services is more than
their supply, the resultant inflation is:
(a) cost push inflation.
(b) stagflation.
(c) deflation.
(d) demand pull inflation.

22. If a fisherman must sell all of his daily catch

before it spoils for whatever price he is offered,
once the fish are caught the fishermans price
elasticity of supply for fresh fish is _________.
(a) zero.
(b) infinite.
(c) one.
(d) unable to be determined from this
information.

16. The actual disinvestment in the year 2010-11 is

_______.
(a) Rs. 5,000 crore.
(b) Rs. 22,763 crore.
(c) Rs. 1,567 crore.
(d) Rs. 4,000 crore.
17. Trade-offs are required because wants are
unlimited and resources are _______.
(a) economical.
(b) unlimited.
(c) efficient.
(d) scarce

23. If consumers always spend 15 percent of their

income on food, then the income elasticity of
demand for food is _________.
(a) 1.50
(b) 1.15
(c) 1.00
(d) 0.15


24. If marginal revenue exceeds marginal cost, a
monopolist should _________.
(a) increase output.
(b) decrease output.
(c) keep output the same because profits are
maximized when marginal revenue exceeds
marginal cost.
(d) raise the price.

31. Over the years the number of cancer cases has

_________.
(a) increased.
(b) decreased.
(c) remained constant.
(d) doubled.
32. Quantitative restrictions on _________ items
were removed in the EXIM Policy of 2001-02.
(a) 123
(b) 193
(c) 715
(d) 183

25. A market structure in which many firms sell

products that are similar but not identical is
known as
(a) monopolistic competition.
(b) monopoly.
(c) perfect competition.
(d) oligopoly.

Read Figure 1 and answer below 4 questions.

Bacon 50

26. Net national product at market price minus net

indirect taxes is equal to _________.
(a) net foreign investment
(b) net foreign investment plus net domestic
investment
(c) net national product at factor cost.
(d) replacement expenditure

40

20
10

is

C
D

33. Refer to Figure 1, if the economy is operating at

point C, the opportunity cost of producing an
additional 15 units of bacon is
(a) 40 units of eggs.
(b) 10 units of eggs.
(c) 20 units of eggs.
(d) 30 units of eggs.
34. Refer to Figure 1, if the economy was operating
at E:
(a) the opportunity cost of 20 additional units of
eggs is 10 units of bacon.
(b) the opportunity cost of 20 additional units of
eggs is 20 units of bacon.
(c) the opportunity cost of 20 additional units of
eggs is 30 units of bacon.
(d) 20 additional units of eggs can be produced
with no impact on bacon production.

called

35. If the economy moves from point A to point D in

Figure 1 then:
(a) the opportunity cost of eggs in terms of
bacon falls.
(b) the opportunity cost of eggs in terms of
bacon rises.
(c) the opportunity cost of eggs in terms of
bacon is constant.
(d) the economy becomes less efficient.
4

Eggs

29. For the period of (1980-2005) the average GDP

growth rate was about _________ % per annum.
(a) 6.6
(b) 5.4
(c) 2.5
(d) 5.6
water

10 20 30 40 50 60 70

28. _________ countries are more subject to cyclical

fluctuations.
(a) European.
(b) Capital biased, advanced countries.
(c) Asian.
(d) American

from

30

27. Estate duty was levied on the _________.

(a) incomes of the individual
(b) production of goods
(c) export and import of goods
(d) total property passing to the heirs on the
death of a person.

30. Electricity generated

_________.
(a) thermal electricity.
(b) hydel electricity.
(c) atomic energy.
(d) tidal energy.


36. Point F in figure 1 represents:
(a) none of these answers.
(b) a combination of production that can be
reached if we reduce the production of eggs
by 20 units.
(c) a combination of production that can be
reached if there is a sufficient advance in
technology.
(d) a combination of production that is
inefficient because there are unemployed
resources.

41. Suppose there are three identical vases available

to be purchased. Buyer 1 is willing to pay Rs 30
for one, buyer 2 is willing to pay Rs 25 for one,
and buyer 3 is willing to pay Rs 20 for one. If the
price is Rs 25, how many vases will be sold and
what is the value of consumer surplus in this
market?
(a) Three vases will be sold and consumer
surplus is Rs. 80.
(b) One vase will be sold and consumer surplus is
Rs. 5.
(c) One vase will be sold and consumer surplus is
Rs.30.
(d) Two vases will be sold and consumer surplus
is Rs. 5.

37. Which of the following represents a movement

towards better utilisation of existing resources?
(a) A movement from point A to point B.
(b) A movement from point E to point B.
(c) A movement from point C to point B.
(d) A movement from point F to point B.

Read the following paragraph and answer below 4

questions
Nicole owns a small pottery factory. She can make
1,000 pieces of pottery per year and sell them for Rs.
100 each. It costs Nicole Rs. 20,000 for the raw
materials to produce the 1,000 pieces of pottery. She
has invested Rs 1,00,000 in her factory and
equipment: Rs 50,000 from her savings and Rs
50,000 borrowed at 10 percent. (Assume that she
could have loaned her money out at 10 per cent,
too.) Nicole can work at a competing pottery factory
for Rs. 40,000 per year.

38. Suppose that the price of a new bicycle is Rs.

200. Natalie values a new bicycle at Rs. 400.
What is the value of total consumer surplus if
Natalie buys a new bike?
(a) Rs. 500
(b) Rs. 300
(c) Rs. 200
(d) Rs. 400
39. Suppose that at a price of Rs 300 per month,
there are 30,000 subscribers to cable television in
Small Town. If Small Town Cablevision raises its
price to Rs. 400 per month, the number of
subscribers will fall to 20,000. Using the midpoint
method for calculating the elasticity, what is the
price elasticity of demand for cable TV in Small
Town?
(a) 1.4
(b) 0.66
(c) 0.75
(d) 2.0

42. The accounting cost at Nicoles pottery factory is:

(a) Rs. 25,000
(b) Rs. 50,000
(c) Rs. 80,000
(d) Rs. 75,000
43. The economic cost at Nicoles factory is:
(a) Rs. 75,000
(b) Rs. 70,000
(c) Rs. 80,000
(d) Rs 30,000

40. If a buyers willingness to pay for a new car is Rs.

200,000 and she is able to actually buy it for
Rs.1,80,000 her consumer surplus is
(a) Rs.18,000
(b) Rs.20,000
(c) Rs. 2,000
(d) Rs. 0

44. The accounting profit at Nicoles pottery factory

is:
(a) Rs. 30,000
(b) Rs.50,000
(c) Rs. 80,000
(d) Rs 75,000
45. The economic profit at Nicoles factory is:
(a) Rs. 75000
(b) Rs. 35000
(c) Rs 80000
(d) Rs 30000


Mr. X and Co. operates in a perfectly competitive
market. He sells his product at Rs. 8 per unit. His
fixed costs are Rs. 100. His other costs are given
below. Read the following table and answer below
five questions.
Output
Variable
Fixed
Total
Marginal
Cost
Cost
Cost
Cost
0
0
1
5
2
11
3
18
4
26
5
36
6
50

52. Which of the following pairs of events are

mutually exclusive?
(a) A : The student reads in a school B : He
studies Philosophy
(b) A : Raju was born in India B : He is a fine
Engineer
(c) A : Ruma is 16 years old B : She is a good
singer
(d) A : Peter is under 15 years of age B : Peter
is a voter of Kolkata
53. Which of the following statements is untrue for
tabulation?
(a) Statistical analysis of data requires tabulation
(b) It facilitates comparison between rows and
not columns
(c) Complicated data can be presented
(d) Diagrammatic
representation
of
data
requires tabulation

46. What is Mr X and Cos total cost when 4 units are

produced?
(a) Rs. 126
(b) Rs. 100
(c) Rs. 26
(d) Rs. 8

54. For a moderately skewed distribution, which of

the following relationship holds?
(a) Mean Mode = 3 (Mean Median)
(b) Median Mode = 3 (Mean Median)
(c) Mean Median = 3 (Mean Mode)
(d) Mean Median = 3 (Median Mode)

47. When Mr. X and Cos production increases from 5

to 6 units, his marginal cost becomes?
(a) Rs. 8
(b) Rs. 14
(c) Rs. 10
(d) Rs. 6

55. If two events A and B are independent,

then P(A B)
(a) Equals to P(A) P(B)
(b) Equals to P(A) P(B)
(c) Equals to P(A) P(B/A)
(d) Equals to P(B) P(A/B)

48. The average fixed cost of producing 4 units is:

(a) Rs 1.50
(b) Rs 2.25
(c) Rs. 25
(d) Rs. 3.00

56. Regression analysis is concerned with

(a) Establishing a mathematical relationship
between two variables
(b) Measuring the extent of association between
two variables
(c) Predicting the value of the dependent
variable for a given value of the independent
variable
(d) Both (a) and (c)

49. The average total cost of producing 6 units is:

(a) Rs. 2.50
(b) Rs. 3.00
(c) Rs. 25
(d) Rs. 30
50. When will Mr X and Co maximize profits?
(a) When 4 units are produced.
(b) When 5 units are produced.
(c) When the company shuts down.
(d) When 3 units are produced.

57. For
(a)
(b)
(c)
(d)

51. Simple random sampling is very effective if

(a) The population is not very large
(b) The population is not much heterogeneous
(c) The population is partitioned into several
sections
(d) Both (a) and (b)

58. The best method to collect data in case of natural

calamity is
(a) Personal interview
(b) Telephone interview
(c) Mailed questionnaire method
(d) Indirect interview

a Poisson distribution,
Mean and standard deviation are equal.
Mean and variance are equal.
Standard deviation and variance are equal.
Both (a) and (b).


59. Sequence of periodic payments/
regularly over a period of time is called
(a) Perpetuity
(b) Annuity
(c) Annuity regular
(d) Annuity due

receipts

67. The two variables are known to be_______ if the

movement on the part of one variable does not
produce any movement of the other variable in a
particular direction.
(a) Correlated
(b) Positive correlated
(c) Negative correlated
(d) Uncorrelated

60. Which of the following statements is true?

(a) Usually mean is the best measure of central
tendency
(b) Usually median is the best measure of
central tendency
(c) Usually mode is the best measure of central
tendency
(d) Normally, GM is the best measure of central
tendency

68. If two letters are taken at random from the word

HOME, _________ is the probability that none of
the letters would be vowels.
(a) 1/6
(b) 1/2
(c) 1/3
(d)

61. ________ distribution is symmetrical when p =

0.5.
(a) Chi- square
(b) Population
(c) Poisson
(d) Binomial

69. In ________ years a sum will double at 5% p.a.

compound interest.
(a) 15 years 3 months
(b) 14 years 2 months
(c) 14 years 3 months
(d) 15 years 2 months

62. log 32/4 is equal to ________.

(a) log 32/log4
(b) log 32 log4
(c) 2
(d) None of these

70. When the data are classified in respect of

successive time points, they are known
as_______.
(a) Chronological data
(b) Geographical data
(c) Ordinal data
(d) Cordinal data

63. If ________, the roots are real and equal.

(a) b 4ac= 0
(b) b 4ac > 0
(c) b 4ac < 0
(d) b 4ac > 0

71.

(a) 4
(b) 4
(c) Does not exist
(d) None of these

64. ________ is the mean proportional between 12x2

and 27y2.
(a) 18 xy
(b) 81 xy
(c) 8 xy
(d) 19.5 xy

72. The derivative of y= x+1 is

(a) 1 / x 1 +
(b) 1 / x 1 +
(c) 1 / 2 x 1 +
(d) None of these

65. The letters of the words CALCUTTA and

AMERICA are arranged in all possible ways. The
ratio of the number of these arrangement is
_______.
(a) 1: 2
(b) 2:1
(c) 1:1
(d) 1.5:1
66. The 7th term
24is_______.
(a) 384
(b) 834
(c) 438
(d) 854

of

the

series

6,

73. log xdx is equal to

(a) x logx
(b) x logx x2 + k
(c) x logx + k
(d) None of these

12,

74. If g(x) = x1/x, g() is

(a) 1
(b) 2
(c) 3/2
(d) 3
7

2
x 4
lim
is equal to
x x + 2


81. The sum of a certain number of terms of an AP
series 8, 6, 4, is 52. The number of terms
is
(a) 12
(b) 13
(c) 11
(d) None of these

75. The sum of first n natural number

(a) (n/2) (n + 1)
(b) (n/6) (n + 1) (2n + 1)
(c) [(n/2) (n + 1)]
(d) None of these.
76. Chain index is equal to
(a)

link relative of current year chain index of the current year

82. If you save 1 paise today, 2 paise the next day 4

paise the succeeding day and so on, then your
total savings in two weeks will be
(a) Rs. 163
(b) Rs. 183
(c) Rs. 163.83
(d) None of these

100

(b)

link relative of previous year chain index of the current year

100

(c)

link relative of current year chain index of the previous year

83. If the set P has 3 elements, Q four and R two

then the set PQR contains
(a) 9 elements
(b) 20 elements
(c) 24 elements
(d) None of these

100

(d)

link relative of previous year chain index of the previous year

100

84. A function f(x) is defined by f(x) = (x2)+1 over

all real values of x. now f(x) is
(a) Continuous at x = 2
(b) Discontinuous at x = 2
(c) Undefined at x = 2
(d) None of these

77. If from a population with 25 members, a random

sample without replacement of 2 members is
taken, the number of all such samples is
(a) 300
(b) 625
(c) 50
(d) 600

85. The number of accidents for seven days in a

locality is given below:
No. of
0
1
2
3
4
5
6
accidents :
Frequency : 15
19
22
31
9
3
2
What is the number of cases when 3 or less accident
occurred?
(a) 56
(b) 6
(c) 68
(d) 87

78. If A = Rs. 1000, n = 2 years, R = 6% p.a

compound interest payable half-yearly then
principal ( P ) is
(a) Rs. 888.80
(b) Rs. 880
(c) 800
(d) None of these
79. There are 10 trains plying between Calcutta and
Delhi. The number of ways in which a person can
go from Calcutta to Delhi and return by a
different train is
(a) 99
(b) 90
(c) 80
(d) None of these

86. On the average experienced person does 5 units

of work while a fresh one 3 units of work daily
but the employer has to maintain an output of at
least 30 units of work per day. This situation can
be expressed as
(a) 5x + 3y < 30
(b) 5x + 3y >30
(c) 5x + 3y < 30
(d) None of these

80. Every person shakes hands with each other in a

party and the total number of hand shakes is 66.
The number of guests in the party is
(a) 11
(b) 12
(c) 13
(d) 14

87. The mean salary for a group of 40 female

workers is 5200 per month and that for a group
of 60 male workers is 6800 per month. What is
the combined mean salary?
(a) 6500
(b) 6200
(c) 6160
(d) 6100
8


95. Five times of a positive whole number is 3 less
than twice the square of the number. The
number is
(a) 3
(b) 4
(c) 3
(d) 2

88. The standard deviation of 10, 16, 10, 16, 10, 10,
16, 16 is
(a) 4
(b) 6
(c) 3
(d) 0
89. A bag contains 15 one rupee coins, 25 two rupee
coins and 10 five rupee coins. If a coin is
selected at random from the bag, then the
probability of not selecting a one rupee coin is
(a) 0.30
(b) 0.70
(c) 0.25
(d) 0.20

96. If the profits of a company remains the same for

the last ten months, then the standard deviation
of profits for these ten months would be ?
(a) Positive
(b) Negative
(c) Zero
(d) (a) or (c)
97. The mean of a binomial distribution
parameter n and p is
(a) n (1 p).
(b) np (1 p).
(c) np.
(d) np(1 p)

90. If a card is drawn at random from a pack of 52

cards, what is the chance of getting a Spade or
an ace?
(a) 4/13
(b) 5/13
(c) 0.25
(d) 0.20

98. The total area of the normal curve is

(a) One
(b) 50 per cent
(c) 0.50
(d) Any value between 0 and 1

91. The quartile deviation of a normal distribution

with mean 10 and Standard Deviation 4 is
(a) 0.675
(b) 67.50
(c) 2.70
(d) 3.20

99. What is the present value of Re.1 to be received

after two years compounded annually at 10%?
(a) 0.73
(b) 0.83
(c) 0.93
(d) None of these.

92. If there are 3 observations 15, 20, 25 then the

sum of deviation of the observations from their
A.M. is
(a) 0
(b) 5
(c) 5
(d) None of these.

100. The sum of the series 9, 5, 1,. to 100 terms is

(a) 18900
(b) 18900
(c) 19900
(d) None of these.

93. eax dx
(a) ex + c
ax
e
(b)
+c
a
(c) log x + c
(d) eax + c
94.

d
dx
(a)
(b)
(c)
(d)

x
(a )
ax log e a
log x
eax
ae ax

with