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Business Economics Mock Test - 5 - CA Foundation MCQ


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30 Questions MCQ Test Mock Tests & Past Year Papers for CA Foundation - Business Economics Mock Test - 5

Business Economics Mock Test - 5 for CA Foundation 2024 is part of Mock Tests & Past Year Papers for CA Foundation preparation. The Business Economics Mock Test - 5 questions and answers have been prepared according to the CA Foundation exam syllabus.The Business Economics Mock Test - 5 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 - 5 below.
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Business Economics Mock Test - 5 - Question 1

Which of the following markets closely resembles a perfectly competitive market?

Detailed Solution for Business Economics Mock Test - 5 - Question 1

Markets for agricultural products like rice, wheat etc resemble perfectly competitive markets because there are a large number of producers, free entry and exit and products are identical.

Business Economics Mock Test - 5 - Question 2

Q. Calculate the value added in the primary sector from the following data. Ignore units.

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

Value added = Value of output in primary sector - Value of raw materials purchased by primary sector
= 800 - 400 
= 400

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Business Economics Mock Test - 5 - Question 3

Full-bodied money is that money whose money value and commodity value are:

Detailed Solution for Business Economics Mock Test - 5 - Question 3

For full-bodied money, the money value and commodity value of the money are equal in the market. 

Business Economics Mock Test - 5 - Question 4

The difference between gross domestic product and net domestic product is due to ___

Detailed Solution for Business Economics Mock Test - 5 - Question 4

The difference between gross domestic product and net domestic product is due to depreciation.

Business Economics Mock Test - 5 - Question 5

Diagrammatic presentation of consumer's indifference set is called

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

An indifference curve is a locus of all such points, which show different combinations offering the same level of satisfaction to the consumer. It is always related to the choice and preference of the consumer.

Business Economics Mock Test - 5 - Question 6

Wealth is an example of:

Detailed Solution for Business Economics Mock Test - 5 - Question 6

Wealth is a stock variable.

Business Economics Mock Test - 5 - Question 7

Find MPC when investment multiplier = 1.

Detailed Solution for Business Economics Mock Test - 5 - Question 7

Business Economics Mock Test - 5 - Question 8

An increase in the money supply will cause the AD curve to:

Detailed Solution for Business Economics Mock Test - 5 - Question 8

An increase in the money supply increases the aggregate demand, as people now hold more money.

Business Economics Mock Test - 5 - Question 9

Which of the following is NOT a non-tax receipt?

Detailed Solution for Business Economics Mock Test - 5 - Question 9

Gift tax belonged to direct taxes which does not have much significance in terms of revenue yield. It is not a non-tax receipt.

Business Economics Mock Test - 5 - Question 10

There are three sellers A, B and C in a market. Their supply curves are given by the following equations.
qA=5p−30, p≥8
qB=2p+20, p≥10
qC=3p+10, p≥15
What is the total quantity supplied at a market price of Rs 10?

Detailed Solution for Business Economics Mock Test - 5 - Question 10

Note that the supply curve of C starts only above a price level of 15. Hence, at a price of Rs 10, only the supply curves of B and C are relevant.
q=qA+qB
⇒q=7p−10
At p=10, the quantity supplied is 60 units.

Business Economics Mock Test - 5 - Question 11

What is the profit maximization rule for monopolistic competition?

Detailed Solution for Business Economics Mock Test - 5 - Question 11

Profit maximization rule for a monopolistic competition is the same as that of a monopoly.
P >MC = MR

Business Economics Mock Test - 5 - Question 12

If balance of trade is showing a deficit of Rs 200 crore and the value of exports is Rs 700 crore, then, the value of imports would be:

Detailed Solution for Business Economics Mock Test - 5 - Question 12

Imports = Exports - Balance of Trade = 700 - (-200) = 900

Business Economics Mock Test - 5 - Question 13

When onion price hits hard, the poor man simply stops buying it. Which one of these is the correct explanation for this?

Detailed Solution for Business Economics Mock Test - 5 - Question 13

A consumer buys a commodity only when a rupee spent on it yields rupee worth of satisfaction (MUM). A poor man stops the consumption of onion when he finds that a rupee spent on it does not yield rupee worth of satisfaction (no matter what quantity of onions is purchases), so that, Mux/PX<MuM.

Business Economics Mock Test - 5 - Question 14

Tax that is imposed on value added at the various stages of production is known as

Detailed Solution for Business Economics Mock Test - 5 - Question 14

Tax that is imposed on value added at the various stages of production is known as value-added tax.

Business Economics Mock Test - 5 - Question 15

Which of these is a side effect of deflation?

Detailed Solution for Business Economics Mock Test - 5 - Question 15

Deflationary periods often see depression or recession.

Business Economics Mock Test - 5 - Question 16

The economizing problem involves the allocation of resources among competing wants. There is an economizing problem because there are:

Detailed Solution for Business Economics Mock Test - 5 - Question 16

Both A and B. Economic problem is the problem of choice. It arises because resources are scarce and have alternative uses.

Business Economics Mock Test - 5 - Question 17

When C = 300 + 0.8Y and Y = 1,000, saving at zero income level will be

Detailed Solution for Business Economics Mock Test - 5 - Question 17

C + S = Y
At zero income level,
C = -S
When Y = 0, C = 300 + 0.8(0) = 300
Therefore, S = -300

Business Economics Mock Test - 5 - Question 18

Which of the following is not a determinant of a good's supply?

Detailed Solution for Business Economics Mock Test - 5 - Question 18

Income of consumers who buy a good will only affects the demand for the good. All other factors will affect the supply.

Business Economics Mock Test - 5 - Question 19

The act of holding money as insurance against cases of emergency gives rise to ______________ demand.

Detailed Solution for Business Economics Mock Test - 5 - Question 19

The act of holding money as insurance against cases of emergency gives rise to precautionary demand.

Business Economics Mock Test - 5 - Question 20

The marginal cost of the sixth unit of output is :

Detailed Solution for Business Economics Mock Test - 5 - Question 20

Business Economics Mock Test - 5 - Question 21

Study the supply curve given below and answer the following question.

Q. ​At what price is the producer surplus equal to $2?

Detailed Solution for Business Economics Mock Test - 5 - Question 21

Producer surplus, II is the area above the supply curve and below the price line.
It can be seen that at a price of $3
II =1/2×(3−1)×2=$2,

Business Economics Mock Test - 5 - Question 22

On account of an injection of aggregate demand, the equilibrium level of income

Detailed Solution for Business Economics Mock Test - 5 - Question 22

On account of an injection of aggregate demand, the equilibrium level of income increases.

Business Economics Mock Test - 5 - Question 23

The number of times a rupee is used in transactions is called:

Detailed Solution for Business Economics Mock Test - 5 - Question 23

Velocity of circulation of money is the number of times a rupee is used in transactions.

Business Economics Mock Test - 5 - Question 24

If borrowing and other liabilities are added to the budget deficits we get_______________ :

Detailed Solution for Business Economics Mock Test - 5 - Question 24

Fiscal deficit estimates borrowings.

Business Economics Mock Test - 5 - Question 25

The ability to choose between stocks in India and stocks in the US for investment is a part of ___linkage.

Detailed Solution for Business Economics Mock Test - 5 - Question 25

This is part of a financial markets linkage.

Business Economics Mock Test - 5 - Question 26

 Which of the following economists estimated per capita income during the colonial period?

Detailed Solution for Business Economics Mock Test - 5 - Question 26

All of these economists made an attempt to estimate the per capita income during the colonial period.

Business Economics Mock Test - 5 - Question 27

At the point of inflexion:

Detailed Solution for Business Economics Mock Test - 5 - Question 27

Point of inflexion is the point where the slope of the TP curve reaches the maximum and starts decreasing. At this point, MP is maximum.

Business Economics Mock Test - 5 - Question 28

Find incremental investment when equilibrium GDP increases by Rs 50,000 and half of additional income is always saved in the economy.

Detailed Solution for Business Economics Mock Test - 5 - Question 28


Business Economics Mock Test - 5 - Question 29

Borrowings belong to:

Detailed Solution for Business Economics Mock Test - 5 - Question 29

Borrowings belong to the capital account.

Business Economics Mock Test - 5 - Question 30

Why did US adopt the UK's technology readily?

Detailed Solution for Business Economics Mock Test - 5 - Question 30

 

The UK technology was capital intensive and labour saving and made sense in a high wage US economy.

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