Tag: business economics and quantitative methods

Questions Related to business economics and quantitative methods

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

  1. True

  2. False

Show answer
Correct Option: A
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, $\text{Net profit} = TR - TC$.

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

  1. True

  2. False

Show answer
Correct Option: A
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.

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

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

  1. total revenue and total cost technique

  2. marginal revenue and marginal cost technique

  3. demand and supply technique

  4. none of the above

Show answer
Correct Option: B

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

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

  1. MC is falling

  2. MR is greater than MC

  3. his advertising costs are increasing

  4. average costs seem about to fall

Show answer
Correct Option: B

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

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

  1. Appreciating

  2. Depreciating

  3. Neither (a) nor (b)

  4. Either (a) or (b)

Show answer
Correct Option: A
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.

Depreciation of domestic currency leads to rise in exports. 

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

  1. True

  2. False

Show answer
Correct Option: A

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

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

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

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

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

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

  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

Show answer
Correct Option: C

In spot market, sale and purchase of foreign currency is settled on a specified future date. 

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

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

In spot market, sale and purchase of foreign currency is settled immediately

Depreciation of domestic currency leads to rise in _____________.

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

  1. Exports

  2. Imports

  3. Both (a) and (b)

  4. Neither (a) nor (b)

Show answer
Correct Option: A