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Business Economics Mock Test - 2 - CA Foundation MCQ


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30 Questions MCQ Test Mock Tests & Past Year Papers for CA Foundation - Business Economics Mock Test - 2

Business Economics Mock Test - 2 for CA Foundation 2024 is part of Mock Tests & Past Year Papers for CA Foundation preparation. The Business Economics Mock Test - 2 questions and answers have been prepared according to the CA Foundation exam syllabus.The Business Economics Mock Test - 2 MCQs are made for CA Foundation 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Business Economics Mock Test - 2 below.
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Business Economics Mock Test - 2 - Question 1

 Land

Detailed Solution for Business Economics Mock Test - 2 - Question 1

Land as a Free Gift of Nature:

  • Land is considered a free gift of nature because it exists naturally and is not created by human effort.
  • It includes natural resources like minerals, forests, water, and soil.

Geographical Mobility of Land:

  • Land lacks geographical mobility because it is fixed in location and cannot be moved from one place to another.

Correct Answer: Option A is correct. Land is indeed a free gift of nature, fitting the definition of natural resources.

Business Economics Mock Test - 2 - Question 2

The slope of the TFC curve is equal to

Detailed Solution for Business Economics Mock Test - 2 - Question 2

Slope of TFC curve = 0 since TFC is a constant. TFC curve is a straight line parallel to the x-axis. 

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Business Economics Mock Test - 2 - Question 3

Which of the following rules should be followed by a supplier for profit maximization?

Detailed Solution for Business Economics Mock Test - 2 - Question 3

If the price is greater than the marginal cost of the next unit, the firm should continue production as there is a profit on producing the additional unit.

Business Economics Mock Test - 2 - Question 4

Which one leads to Factor Cost?

Detailed Solution for Business Economics Mock Test - 2 - Question 4

Market price - Net Indirect tax = Factor Cost.

Business Economics Mock Test - 2 - Question 5

At equilibrium, which of the following are true?

Detailed Solution for Business Economics Mock Test - 2 - Question 5

At equilibrium, buyers' willingness to pay is equal to sellers' willingness to accept. The quantity demanded is equal to the quantity supplied. Hence there is no excess demand or supply.

Business Economics Mock Test - 2 - Question 6

The basic difference between macroeconomics and microeconomics is:

Detailed Solution for Business Economics Mock Test - 2 - Question 6

Microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

Business Economics Mock Test - 2 - Question 7

The slope of the TC curve gives

Detailed Solution for Business Economics Mock Test - 2 - Question 7

The slope of the TC curve = ΔTC/Δq= MC

Business Economics Mock Test - 2 - Question 8

Which of the following are examples of legal market power?

Detailed Solution for Business Economics Mock Test - 2 - Question 8

Legal market power arises because of barriers to entry created by the government. This is achieved through patents, copyrights and sometimes even government monopolies like Indian railways.

Business Economics Mock Test - 2 - Question 9

Introduction of money has:

Detailed Solution for Business Economics Mock Test - 2 - Question 9

Money has both separated the acts of purchase and sale, and expanded their scope. 

Business Economics Mock Test - 2 - Question 10

___ is an increase in the quantity of money in circulation without any corresponding increase in goods thus leading to an abnormal rise in price levels.

Detailed Solution for Business Economics Mock Test - 2 - Question 10

Inflation refers to the increase in the quantity of money in circulation without any corresponding increase in goods thus leading to an abnormal rise in price levels.

Business Economics Mock Test - 2 - Question 11

Demand for which of the following goods does not change with a change in income of the consumer?

Detailed Solution for Business Economics Mock Test - 2 - Question 11

Demand for necessary goods is inelastic.

Business Economics Mock Test - 2 - Question 12

The numbers of units produced by a firm and the corresponding costs are tabulated below.

Assuming constant variable cost per unit, calculate the AFC for 100 units.

Detailed Solution for Business Economics Mock Test - 2 - Question 12

Let the fixed cost be F and the variable cost per unit be v.
F +100 v = Rs 2000
F + 250 v = Rs 3500
On solving, we get F = 1000 =TFC and v = 10 = AVC
Now, AFC = TFC / 10 = 1000/100 = Rs 10

Business Economics Mock Test - 2 - Question 13

The phenomenon of increased differences in wealth between the rich and poor countries which started around 1800 is called ___

Detailed Solution for Business Economics Mock Test - 2 - Question 13

The phenomenon of increased differences in wealth between the rich and poor countries which started around 1800 is called the great divergence. 

Business Economics Mock Test - 2 - Question 14

Which of the following would be strictly a microeconomic topic?

Detailed Solution for Business Economics Mock Test - 2 - Question 14

Microeconomics studies economic problems relating to individual economic units like a consumer, or a producer. An increase in the price of TATA Nano is related to an individual unit, which makes it a microeconomics topic.

Business Economics Mock Test - 2 - Question 15

A commercial bank is a bank that:

Detailed Solution for Business Economics Mock Test - 2 - Question 15

A commercial bank provides long-term and short-term loans and creates credit. 

Business Economics Mock Test - 2 - Question 16

What is the relationship between supply of foreign exchange and exchange rate?

Detailed Solution for Business Economics Mock Test - 2 - Question 16

The supply of foreign exchange varies positively and directly with the exchange rate. 

Business Economics Mock Test - 2 - Question 17

Which one of the following is the most accurate definition of economics?

Detailed Solution for Business Economics Mock Test - 2 - Question 17

Economics is the study of how society chooses to allocate its scarce resources in order to satisfy unlimited wants.

Business Economics Mock Test - 2 - Question 18

Suppose at the beginning of the year, company ABC had 5 units in its inventory. At the end of the year, it had 50 units in its inventory. The change in stock here is:

Detailed Solution for Business Economics Mock Test - 2 - Question 18

Change in stock = Closing stock - Opening stock = 50 - 5 = 45

Business Economics Mock Test - 2 - Question 19

Which of the following is NOT an input

Detailed Solution for Business Economics Mock Test - 2 - Question 19

Production is a process, not an input. 

Business Economics Mock Test - 2 - Question 20

If entire additional income is converted into additional consumption, the value of multiplier will be

Detailed Solution for Business Economics Mock Test - 2 - Question 20

Multiplier = 1/(1−MPC)
If entire additional income is converted into additional consumption, MPC = 1.
Therefore, the value of multiplier will be infinity.

Business Economics Mock Test - 2 - Question 21

___ goods have positive income effect.

Detailed Solution for Business Economics Mock Test - 2 - Question 21

The demand for normal goods increases as income increases.

Business Economics Mock Test - 2 - Question 22

A car running between Delhi and Agra at a speed of 120 km/h includes: 

Detailed Solution for Business Economics Mock Test - 2 - Question 22

Velocity is a flow variable. 

Business Economics Mock Test - 2 - Question 23

If MPC = 0.9, then value of multiplier will be :

Detailed Solution for Business Economics Mock Test - 2 - Question 23

Business Economics Mock Test - 2 - Question 24

When RBI wants to reduce liquidity in the banking system,

Detailed Solution for Business Economics Mock Test - 2 - Question 24

When RBI wants to reduce liquidity in the banking system, it increases the CRR as it reduces the money supply in the economy.

Business Economics Mock Test - 2 - Question 25

Casual workers are covered under?

Detailed Solution for Business Economics Mock Test - 2 - Question 25

Chronic poverty is a phenomenon whereby an individual or group is in a state of poverty over extended period of time. Casual workers are covered under chronic poor, because they are employed for brief periods, and are generally unemployed.

Business Economics Mock Test - 2 - Question 26

In which of these systems does the ownership of the facility lie with the private enterprise?

Detailed Solution for Business Economics Mock Test - 2 - Question 26

In the BOO (Build. Own. Operate) system, the ownership of the facility lies with the private enterprise.

Business Economics Mock Test - 2 - Question 27

If the economy is producing a combination of goods inside its production possibilities frontier, then

Detailed Solution for Business Economics Mock Test - 2 - Question 27

Any point inside the PPC indicates inefficient utilization of resources.

Business Economics Mock Test - 2 - Question 28

A quantity measured per unit of time period is known as :

Detailed Solution for Business Economics Mock Test - 2 - Question 28

Flow variables are measured per unit time. 

Business Economics Mock Test - 2 - Question 29

In India, the balance of payments has

Detailed Solution for Business Economics Mock Test - 2 - Question 29

India’s BOP has seen a deficit during most years, as India is a net importer.

Business Economics Mock Test - 2 - Question 30

Which of the following is a feature of the Informal sector?

Detailed Solution for Business Economics Mock Test - 2 - Question 30

Workers in the informal sector are paid unfairly low wages.

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