All questions of Practice Questions for Commerce Exam

Assertion (A): Data is classified in order to make them simple and brief.
Reason (R): It is easy to calculate the result with the help of classification of data in statistics.

The correct answer is option B: Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

Explanation:
Classification of data is an important step in statistics to organize and simplify large amounts of data. It involves grouping data into categories or classes based on certain characteristics or criteria. This process helps in summarizing the data and presenting it in a more manageable and understandable form.

Reason (R):
While it is true that classification of data can make calculations easier in some cases, it is not the sole purpose of data classification. The primary objective of data classification is to organize and simplify data, making it easier to analyze, interpret, and draw meaningful conclusions. By grouping similar data together, patterns and trends can be identified more effectively.

Example:
For example, consider a dataset of sales data for a company. The data can be classified into different categories such as product type, region, and time period. By organizing the data in this way, it becomes easier to analyze sales trends for different products, compare sales performance across different regions, and track changes over time.

Benefits of Data Classification:
1. Simplifies data: Classification helps in reducing the complexity of data by grouping similar data together. This makes it easier to understand and interpret the information.
2. Enhances analysis: By organizing data into categories, it becomes easier to identify patterns, trends, and relationships. This aids in conducting more accurate and effective analysis.
3. Facilitates decision-making: Classified data provides a clear overview of different aspects, making it easier for decision-makers to derive insights and make informed decisions.
4. Improves data presentation: Classifying data allows for the creation of charts, graphs, and visual representations that make it easier to communicate and present information.
5. Enables comparison: Classification of data enables comparisons between different categories, helping to identify variations and differences that may exist.

Conclusion:
While the reason provided in the statement is partially correct, it does not fully explain the purpose of data classification. Data classification is primarily done to simplify and organize data, making it more manageable and understandable. The ease of calculation is an additional benefit that comes with the classification of data in statistics.

False Base Line is a device relating to graphical presentation. This line is used to break the continuity of Y-axis with the origin. A false base line is used when figures start with high values. If we maintain continuity of the value from the origin then sufficient portion of the graph would go waste. In the diagram given here, since all the values are confined between 800 and 1100. Therefore, in such a case, a false base line is used. After the false base line, we can start from the actual high figures as shown in the graph.

• Assertion (A): The problem of "what to produce" is indeed related to the scarcity of resources because economies must make choices about which goods and services to produce with the limited resources available.
• Reason (R): Human wants are unlimited, but resources are scarce, which correctly explains the problem described in the assertion. Due to scarcity, economies cannot produce everything people want, and they must prioritize and allocate resources efficiently.

Research results showed that for each one unit of increase in the variable of happiness 0.27 is decreased from the personnel's' death anxiety. Thus there is a significant and inverse correlation between two variables of personnel's happiness and death anxiety.

Perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barrier, buyers have “perfect” or full information, and companies cannot determine prices. For example consider a farmers market where each vendor sells the same type of jam. There is little differentiation between each of their products, as they use the same recipe, and they each sell them at an equal price. At the same time, sellers are few and free to participate in the market without any barrier. Buyers, in this case, would be fully knowledgeable of the product's recipe, and any other information relevant to the good.

The arithmetic mean of the following observation 4, 8, 12, 16, is 10. 3. Cumulative frequency is needed while finding the median of the distribution. In case of calculation of median after arranging the data in ascending or descending order, the cumulative frequencies are calculated.

Throughout history, there have been oligopolies in many different industries, including steel manufacturing, oil, railroads, tire manufacturing, grocery store chains, and wireless carriers. Other industries with an oligopoly structure are airlines and pharmaceuticals.

The weighted mean is a type of mean that is calculated by multiplying the weight (or probability) associated with a particular event or outcome with its associated quantitative outcome and then summing all the products together. It is very useful when calculating a theoretically expected outcome where each outcome has a different probability of occurring, which is the key feature that distinguishes the weighted mean from the arithmetic mean.

Correct Formulas are

First and Necessary Condition for Equilibrium:

The first and necessary condition for equilibrium in a firm is that the firm's marginal cost (MC) equals marginal revenue (MR). In other words, the rate at which the cost of producing an additional unit of output (MC) is equal to the additional revenue earned from selling that unit (MR).

Explanation:

- Equilibrium in a Firm: Equilibrium in a firm refers to the state where the firm is producing the quantity of output that maximizes its profit. It is the point at which the firm has optimized its production and pricing decisions to achieve the highest level of profit.

- MC = MR: To be in equilibrium, the first condition that must be fulfilled is that the firm's marginal cost (MC) must equal marginal revenue (MR). Marginal cost is the additional cost incurred by the firm in producing one more unit of output, while marginal revenue is the additional revenue earned from selling that additional unit of output.

- Importance of MC = MR: When MC is equal to MR, it implies that the firm is neither overproducing nor underproducing. If MC is less than MR, it means that the firm can increase its profit by producing more units of output. On the other hand, if MC is greater than MR, it indicates that the firm can increase its profit by producing fewer units of output.

- Maximum Profit: The second condition for equilibrium is that the firm's MC must be greater than MR beyond the level of output at which MC = MR. This means that while MC = MR may be fulfilled at more than one output level, only the output level beyond which MC > MR will result in maximum profits for the firm.

- Significance: The fulfillment of the first condition alone, where MC equals MR, does not ensure maximum profits for the firm. It is the combination of MC = MR and MC > MR that leads to the determination of the optimal output level, which maximizes the firm's profit.

In conclusion, the first and necessary condition for equilibrium in a firm is that the firm's marginal cost (MC) equals marginal revenue (MR). This condition ensures that the firm is producing the quantity of output that maximizes its profit. However, it is important to note that MC > MR beyond the level of output at which MC = MR is also required for the firm to achieve maximum profits.

Scatter diagram offers a graphic expression of the direction and degree of correlation. To construct a scatter diagram, x variables taken on X-axis and y variable is taken on Y-axis. It gives a precise numerical value of the degree of linear relationship between two variables.

All economic problems arises due to unlimited human wants and limited resources. Moreover, these resources have alternative uses and wants keep on increasing each day. This economic problem is also known as the problem of choice or the problem of allocating resources to alternative uses. All the desires and aspirations and motives of humans are known as human wants in economics. And the wants that can be satisfied with goods and services of any kind are economic wants.

The accuracy of a survey estimate refers to the closeness of the estimate to the true population value. Where there is a discrepancy between the value of the survey estimate and true population value, the difference between the two is referred to as the error of the survey estimate.

Assertion and Reasoning: Tables in Investigation

Assertion (A): Tables are used to clarify the object of the investigation.

Reason (R): Tables are the systematic presentation of the data.

Explanation:

Tables are widely used in research and investigations to present data in an organized and structured format. The Assertion (A) states that tables are used to clarify the object of the investigation. This statement is true because tables help to present the data in a clear and concise manner. Tables are used to summarize, compare, and contrast data, which makes it easier for the researcher to analyze and understand the information.

The Reason (R) states that tables are the systematic presentation of the data. This statement is also true because tables are a structured and organized way to present data. Tables help to organize large amounts of information and present them in a logical and systematic manner. This makes it easier for the reader to understand and analyze the data presented.

Therefore, both Assertion (A) and Reason (R) are true. However, Reason (R) alone is not the correct explanation of Assertion (A). The reason why tables are used in investigations is not only because they are a systematic presentation of data but also because they help to clarify the object of the investigation.

Hence, the correct answer is option (B).

Assertion (A): Scatter Diagram method is a graphic expression of the degree and direction or absence of correlation.
Reason (R): Scatter Diagram method fails to produce definite trend.

Explanation:
A scatter diagram is a graphical representation of the relationship between two variables. It consists of a series of data points plotted on a graph with one variable on the x-axis and the other variable on the y-axis. The points on the graph represent the values of the variables for each data point.

Assertion (A) is true: The scatter diagram method is indeed a graphic expression of the degree and direction or absence of correlation. By plotting the data points on the graph, we can visually analyze the relationship between the two variables and determine if there is a correlation (positive or negative) or no correlation at all. The scatter diagram provides a clear visual representation of the data, allowing us to assess the strength and direction of the relationship.

Reason (R) is true: The scatter diagram method does not provide a definite trend. This means that it does not give a precise mathematical equation or formula to describe the relationship between the variables. Instead, it gives a general idea of the relationship by showing the overall pattern of the data points. This is because the scatter diagram is based on observations and does not involve any mathematical calculations or statistical analysis.

Explanation of the reason (R) as the correct explanation of assertion (A): The reason (R) explains why the scatter diagram method fails to produce a definite trend. Since it is a graphical representation based on observations, it does not provide a precise mathematical relationship between the variables. Therefore, while the scatter diagram method can show the degree and direction or absence of correlation, it does not provide a specific trend line or equation to describe this relationship.

Conclusion: Both the assertion (A) and the reason (R) are true, but the reason (R) is not the correct explanation of the assertion (A). The reason explains why the scatter diagram method fails to produce a definite trend, but it does not contradict or disprove the assertion.

Assertion (A): A table needs to be attractive and simple.
Reason (R): Tables are prepared to make the statistics very lengthy.

The correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.

Explanation:
In this question, we are given an assertion and a reason related to the need for a table to be attractive and simple. Let's analyze each statement separately.

Assertion (A): A table needs to be attractive and simple.
Tables are a commonly used tool in various fields, including commerce, to present data and statistics in a systematic and organized manner. An attractive and simple table can enhance the visual appeal of the information presented and make it easier for the audience to understand and interpret the data. A well-designed table with clear headings, proper formatting, and appropriate use of colors can make the information more engaging and accessible.

Reason (R): Tables are prepared to make the statistics very lengthy.
This reason is incorrect. Tables are not prepared specifically to make statistics lengthy. The purpose of a table is to present data in a concise and structured format. While tables can accommodate large amounts of data, their primary goal is to provide a clear and organized representation of information. Tables can be used to present both small and large datasets, and their length is determined by the amount of data being presented, not the intention to make statistics lengthy.

Therefore, the correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.

Index number in statistics is the measurement of change in a variable or variables across a determined period. It will show general relative change and not a directly measurable figure. An index number is expressed in percentage form.

Research results showed that for each one unit of increase in the variable of happiness 0.27 is decreased from the personnel's' death anxiety. Thus there is a significant and inverse correlation between two variables of personnel's happiness and death anxiety.

The mode is easy to understand and calculate. The mode is not affected by extreme values. The mode is easy to identify in a data set and in a discrete frequency distribution. The mode is useful for qualitative data. The mode can be computed in an open-ended frequency table.

Assertion and Reasoning in Class Intervals

Explanation:

Assertion (A): 0-10, 10-20, 20-30, 30-40 is an example of Class Intervals.
Reason (R): Class Intervals are the value of items shown between two limits in a grouped frequency distribution.

The statement A is true as the given values 0-10, 10-20, 20-30, 30-40 are the examples of Class Intervals. Class interval means the range or group of values in which the data is divided. In statistical analysis, it is essential to group the data to avoid the complexity of handling large data.

The statement R is also true as Class Intervals are the values of items shown between two limits in a grouped frequency distribution. A frequency distribution table is a table that shows the frequency of values in a dataset. The frequency of values is calculated by grouping the data into intervals or classes. The classes have to be continuous, non-overlapping, and exhaustive.

Therefore, both assertion (A) and reasoning (R) are true. However, the reasoning is not the correct explanation of the assertion. The reason describes Class Intervals, but it does not explain why 0-10, 10-20, 20-30, 30-40 are examples of Class Intervals. Hence option B is the correct answer.

The upward shift represents the fact that supply often decreases when the costs of production increase, so producers need to get a higher price than before in order to supply a given quantity of output.

Increasing returns to scale relate to the long run in which all inputs are variable. Increasing marginal returns related to the short run in which one or more input is variable and one or more input is fixed.

Average cost rises only when Marginal Cost is greater than Average Cost. Average cost falls as long as marginal cost is below average cost (irrespective of the fact that marginal cost is rising or falling).

The term positive economics refers to the objective analysis in the study of economics. Most economists look at what has happened and what is currently happening in a given economy to form their basis of predictions for the future. This investigative process is positive economics. Conversely, a normative economic study bases future predictions on value judgments.

At the point of maximum total revenue m the slope of the total revenue curve is zero and the marginal revenue is therefore also zero. The marginal revenue curve thus crosses the horizontal axis at the quantity at which the total revenue is maximum.

Law of Diminishing Marginal Utility
The law of diminishing marginal utility is an economic concept that states that as more and more units of a commodity are consumed, the marginal utility derived from every additional unit must decline. In other words, the satisfaction or utility obtained from consuming each additional unit of a good or service decreases as the quantity consumed increases.

Negative Marginal Utility and Total Utility
When the marginal utility (MU) of a commodity is negative, it means that consuming an additional unit of the commodity actually reduces the total utility (TU) derived from consuming the previous units. This occurs when the additional unit is of lower quality or has a negative effect on overall satisfaction.

Explanation of the Assertion and Reason
Assertion (A): The law of diminishing marginal utility states that as more and more units of a commodity are consumed, marginal utility derived from every additional unit must decline.
Reason (R): When MU is negative, TU will be decreasing.

The correct answer is option 'B' - Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

The law of diminishing marginal utility is a well-established concept in economics, which suggests that as consumption of a commodity increases, the marginal utility derived from each additional unit consumed will decrease. This is because individuals tend to satisfy their most urgent needs or desires first, and as they consume more, the satisfaction gained from each additional unit diminishes.

On the other hand, the reason provided in the statement is not an accurate explanation of the law of diminishing marginal utility. While it is true that when the marginal utility is negative, the total utility will decrease, it does not fully explain the concept of diminishing marginal utility. The law of diminishing marginal utility applies even when the marginal utility is positive but decreasing.

Therefore, while both the assertion and reason are true, the reason does not provide a correct explanation for the assertion. The law of diminishing marginal utility is a broader concept that applies to all situations where marginal utility decreases with increased consumption, regardless of whether the marginal utility is negative or positive.

Assertion (A): Mode is affected by the extreme values.
Reason (R): In mode, the total cannot be obtained.

The correct answer to this question is option D, Assertion (A) is false, but Reason (R) is true.

Explanation:
The mode is a measure of central tendency that represents the value that appears most frequently in a dataset. It is not affected by extreme values or outliers in the data. Therefore, Assertion (A) is incorrect.

Reason (R) is true because the mode does not consider the total or sum of the values in the dataset. It only focuses on identifying the value(s) that occur with the highest frequency. Therefore, it is not possible to obtain the total or sum of the dataset using the mode.

To further understand this, let's consider an example:
Suppose we have a dataset with the following values: 2, 3, 5, 5, 5, 6, 7, 8, 9, 10.

- The mode of this dataset is 5 because it appears most frequently.
- However, the sum of the values is 2+3+5+5+5+6+7+8+9+10 = 60. The mode does not provide any information about the total sum.

Therefore, the mode is not affected by extreme values or outliers, and it does not provide information about the total sum of the dataset. Hence, the correct answer is option D.

Firms are said to be in perfect competition when the following conditions occur: Many firms produce identical products. Firms can enter and leave the market without any restrictions. In other words, there is free entry and exit into and out of the market.

The Law of Increasing Returns may be defined as such “As the proportion of one factor in a combination of factors is increased up to a point, the marginal product of the factor will increase. The phrase 'up to a point' may be carefully noted. The increasing return will be only up to a point.

Understanding Price Floor and Price Support
The assertion and reason presented in the passage are both true, which is why option 'A' is the correct answer. Here’s a detailed explanation:
Assertion (A): Price Floor is also known as Price Support
- Price floors, such as the minimum wage, are designed to maintain a minimum price level in various markets.
- They prevent prices from dropping below a certain threshold, which is essential for ensuring that producers, such as farmers, receive fair compensation for their goods and services.
- This concept is often referred to as "price support" because it supports the price level, protecting the income of those affected.
Reason (R): Price Floor Supports a Price from Falling Below a Certain Level
- The purpose of a price floor is to prevent prices from falling too low, which can lead to negative economic consequences like reduced income for workers or farmers.
- Governments implement price floors to stabilize market prices and provide a safety net during periods of economic downturns or agricultural fluctuations.
- For example, in agriculture, governments may intervene by purchasing surplus products to maintain higher prices, thus supporting farmers' incomes.
Conclusion
- Since both the assertion and reason accurately reflect the characteristics and functions of price floors, they align with the definition provided in the passage.
- Therefore, both statements being true supports the conclusion that option 'A' is correct.
This understanding helps clarify the role of price floors in economic policy and market regulation.

The marginal utility derived from a commodity keeps on decreasing.

The three basic economic problems are regarding the allocation of the resources. These are what to produce, how to produce, and for whom to produce.

Unit Elastic Supply has a PES of 1, where quantity supplied change by the same percentage as the price change.

Factors affecting Supply: Supply refers to the quantity of a good that the producer plans to sell in the market. Supply will be determined by factors such as price, the number of suppliers, the state of technology, government subsidies, weather conditions and the availability of workers to produce the good.

Assertion and Reasoning: Inclusive and Exclusive Series

Assertion (A): When inclusive series is given, it needs to be changed into exclusive series.

Reason (R): It is easy to calculate using exclusive series.

Explanation:

In statistics, the data is usually represented in the form of a series. A series is a set of observations arranged in a particular order. There are two types of series - inclusive series and exclusive series.

An inclusive series includes the upper limit of each class interval, whereas an exclusive series does not include the upper limit of each class interval. For example, if the class interval is 0-10, an inclusive series would include 10 in that interval, whereas an exclusive series would not.

Assertion (A) is true because it is easier to calculate using an exclusive series. This is because the upper limit of each class interval is not included in an exclusive series. Therefore, the midpoint of each class interval can be used as the representative value of that interval. This makes calculations simpler and more accurate.

Reason (R) is also true because it is easier to calculate using an exclusive series. However, it is not the correct explanation of Assertion (A). The correct explanation of Assertion (A) is that exclusive series is preferred because it is easier to calculate.

Therefore, the correct answer is option (B) - Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

A frequency polygon can be created from the histogram or by calculating the midpoints of the bins from the frequency distribution table. The midpoint of a bin is calculated by adding the upper and lower boundary values of the bin and dividing the sum by 2.

The Law Of Diminishing Marginal Utility states that, all else equal, as consumption increases, the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed. Utility is an economic term used to represent satisfaction or happiness. Marginal utility is the incremental increase in utility that results from consumption of one additional unit.

A bar graph is a specific way of representing data using rectangular bars where the length of each bar is proportional to the value they represent. It is basically a graphical representation of data using bars of different heights.

Primary data is the collection of data collected by the investigator for his own purpose for the first time. These are collected from the source of origin.

One important source of oligopoly power is barriers to entry. Barriers to entry are obstacles that make it difficult to enter a given market. This means that new firms cannot enter the market whenever existing firms are making a positive economic profit, as is the case in perfect competition.

The price elasticity of demand is a measure of the responsiveness of demand to a change in price. A food is said to be price inelastic, not responsive to price when its own-price elasticity is greater than -1.0. A food is said to be price elastic responsive to price when its own-price elasticity is less than -1.0.

When more units of a good or service can be produced on a larger scale, yet with (on average) fewer input costs, economies of scale are said to be achieved. Alternatively, this means that as a company grows and production units increase, a company will have a better chance to decrease its costs.

Assertion (A): Ogives can only be made with less than cumulative frequency distribution.
Reason (R): Ogive is a frequency distribution graph by plotting cumulative frequency distribution in the form of a smooth curve.

Explanation:

An ogive is a graph that represents the cumulative frequency distribution of a dataset. It is used to show the cumulative frequency of a dataset up to a certain point. The ogive is created by plotting points on a graph, where the x-axis represents the upper class boundaries of the data and the y-axis represents the cumulative frequency.

Understanding the Assertion (A):
The assertion states that ogives can only be made with less than cumulative frequency distribution. This means that the ogive graph can only be created using the less than type of cumulative frequency distribution.

Understanding the Reason (R):
The reason states that the ogive is a frequency distribution graph that plots the cumulative frequency distribution in the form of a smooth curve. This means that the ogive represents the cumulative frequencies in a graphical form.

Explanation of the Correct Answer:
The correct answer is option 'D', which states that Assertion (A) is false, but Reason (R) is true.
The reason for this is that ogives can be created using both less than and more than type of cumulative frequency distribution. In the less than type, the ogive is plotted by considering the upper class boundaries and the cumulative frequencies up to each class. In the more than type, the ogive is plotted by considering the lower class boundaries and the cumulative frequencies from each class onwards.

Conclusion:
In conclusion, ogives can be made with both less than and more than cumulative frequency distributions. The assertion that ogives can only be made with less than cumulative frequency distribution is false. However, the reason that ogives represent the cumulative frequency distribution in the form of a smooth curve is true.

The firm's marginal revenue will be equal to average revenue as marginal revenue is net addition to the revenue when an additional unit is produced.

Assertion (A): Mode of a series 2, 4, 2, 5, 6, 2, 3, 8, 9, 2, 5, 10 is 2.

Reason (R): Mode of a set of observations is that value which occurs the greatest number of times, i.e., with the highest frequency in a series.

Explanation:
- The mode of a series is defined as the value that appears most frequently in the series.
- In the given series, the number 2 appears 4 times, which is more frequent than any other number.
- Therefore, the mode of the series 2, 4, 2, 5, 6, 2, 3, 8, 9, 2, 5, 10 is indeed 2.
- Hence, Assertion (A) is true.

Reason (R) Explained:
- The reason given for the assertion is that the mode of a set of observations is the value that occurs the greatest number of times, i.e., with the highest frequency in a series.
- In the given series, the number 2 appears 4 times, which is the highest frequency among all the numbers.
- This aligns with the definition of mode, which supports the reason given in the statement.
- Therefore, Reason (R) is true and it is the correct explanation of Assertion (A).

Conclusion:
- Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- Hence, the correct answer is option 'A'.

New technology: When a firm discovers a new technology that allows it to produce at a lower cost, the supply curve will shift to the right as well. ... A technological improvement that reduces costs of production will shift supply to the right, causing a greater quantity to be produced at any given price.

AVC is obtained by dividing the total variable cost by output, i.e., AVC = TVC/Q. Thus, AVC is a part of AC, given AC = AFC + AVC. This is because AC not only includes AVC but also AFC which falls continuously as output rises. Not only this, initially, with the increase in output, AVC falls.