Examination Paper: Instruction To Candidates
Examination Paper: Instruction To Candidates
Examination Paper: Instruction To Candidates
Instruction to candidates
1. This question paper has THREE (3) Section
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SECTION A
Multiple Choice Questions (30*1=30)
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7. If income elasticity of demand is 0.3, then the commodity is:
a. Inferior
b. Luxurious
c. Neutral
d. Necessity
10. The law of diminishing marginal returns refers to the general tendency
for…………… to eventually diminish as more of the variable input is employed,
given the quantity of fixed inputs.
a. marginal cost
b. average product
c. marginal product
d. average total cost
11. In a planned or command economy, all the economic decisions are taken by the:
a. Consumers
b. Workers
c. Government
d. Voters
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13. Cost-output relationship facilitates many managerial relationship such as:
a. Formulating the standards of operations
b. Formulating the rational policy on plant size
c. Formulating a policy of profit prediction
d. All of these
18. Variable costs are costs that increase with output. These costs reflects the use of :
a. Labor
b. Capital
c. Land
d. All of the above
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19. When a perfectly competitive firm makes a decision to shut down, it is most
likely that :
a. Price is below the minimum of average variable cost
b. Fixed costs exceed variable costs
c. Average fixed costs are rising
d. Marginal cost is above average variable cost
22. If GNP is 18% higher than it was last year and the rate of inflation is 10%. Then,
the GNP this year has grown by:
a. 5 %
b. 6 %
c. 7 %
d. 8 %
23. The intermediate goods are excluded from GNP because:
a. They create the problem of duplication
b. Their value is insignificant
c. They are consumed by the poor people
d. They are used in the village
24. In international price discrimination, the price of the product is:
a. High
b. Low
c. Average
d. Difficult to calculate
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25. In public goods, government should:
a. Provide subsidy
b. Impose tax
c. Extend both simultaneously
d. Free of government interventition
28. Prerequisites for price discrimination are all of the following EXCEPT:
a. Division of market
b. Heterogeneous product
c. Identical product
d. Market control
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SECTION B
Short Answers Questions
Answer any five (5) questions out of seven (7) questions (5*6=30)
6. Show how the production possibility frontier illustrates the concept of scarcity, choice
and opportunity cost.
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SECTION C
Long Answer Questions
Attempt any two (2) questions out of three (3) questions. (2*20=40)
1. Explain about various types of pricing practices and which one in widely used around
the world, submit some relevant logics with your answer.
3. Nepalese fashion home has demand function, P = 20 – Q and total cost function C =
Q2 + 8Q + 2, determine the optimal output (Q), price (P), total revenue (R) and total
profit (π)
a. Under profit maximization. (5)
b. Under sales revenue maximization. (5)
c. Under sales revenue maximization subject to the profit constraint of Rs. 10. (5)
d. Why sales revenue maximizing output is greater than profit maximizing
output? (5)
****BEST OF LUCK****