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Business Economics Mock Test - 4 - CA Foundation MCQ


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30 Questions MCQ Test Mock Tests & Past Year Papers for CA Foundation - Business Economics Mock Test - 4

Business Economics Mock Test - 4 for CA Foundation 2024 is part of Mock Tests & Past Year Papers for CA Foundation preparation. The Business Economics Mock Test - 4 questions and answers have been prepared according to the CA Foundation exam syllabus.The Business Economics Mock Test - 4 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 - 4 below.
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Business Economics Mock Test - 4 - Question 1

The costs (LRAC) and prices (P) for four firms are given in the options below. Which of these cannot lie on the long-run supply curve of a firm?

Detailed Solution for Business Economics Mock Test - 4 - Question 1

A firm does not supply when the market price is less than the average cost. For option B, P < LRAC.

Business Economics Mock Test - 4 - Question 2

If automobile manufacturers are producing cars faster than people want to buy them,

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

If automobile manufacturers are producing cars faster than people want to buy them, there is an excess supply and price can be expected to decrease.

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Business Economics Mock Test - 4 - Question 3

The summation of the total production of all firms and industries in the economy gives us the ____________ method.

Detailed Solution for Business Economics Mock Test - 4 - Question 3

The Value-added and the Production method are the same. 

Business Economics Mock Test - 4 - Question 4

If the price is Rs 10, quantity supplied is 20 and the average total cost is Rs 3, then calculate profit.

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

Profit =(P-ATC) q

=7×20=Rs140

Business Economics Mock Test - 4 - Question 5

Concavity of PPC implies:

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

Concavity of PPC always implies increasing slope.

Business Economics Mock Test - 4 - Question 6

Study the supply curve given in the figure.

Q. If the market price is $8, what is the quantity supplied?

Detailed Solution for Business Economics Mock Test - 4 - Question 6

From the supply curve, it can be seen that corresponding to a price of $8, the quantity supplied is 40 units.

Business Economics Mock Test - 4 - Question 7

The supply curve for a monopolist is

Detailed Solution for Business Economics Mock Test - 4 - Question 7

Monopolists are price makers i.e. they decide the price at which to sell a product. Hence, the concept of the supply curve is not applicable for a monopolist.

Business Economics Mock Test - 4 - Question 8

If income increases from 3,000 to 4,000, and autonomous investment increases by 200, the MPC should be

Detailed Solution for Business Economics Mock Test - 4 - Question 8

Business Economics Mock Test - 4 - Question 9

The Central Bank in India is called:

Detailed Solution for Business Economics Mock Test - 4 - Question 9

The Reserve Bank of India is India’s central bank.

Business Economics Mock Test - 4 - Question 10

Adil and Kratu are joining a master's program in management. Adil has freshly graduated out of college and has a job offer worth Rs 5 lakhs from a company. Kratu quit his job which earned him Rs 4 lakhs per year. Whose opportunity cost is more?

Detailed Solution for Business Economics Mock Test - 4 - Question 10

The opportunity cost for Adil is Rs 5 lakhs and for Kratu it is 4 lakhs.

Business Economics Mock Test - 4 - Question 11

The supply curve is upward sloping because __________.

Detailed Solution for Business Economics Mock Test - 4 - Question 11

The supply curve is upward sloping because as price increases, suppliers can justify producing at higher marginal costs as long as MC < P.

Business Economics Mock Test - 4 - Question 12

 In the context of government budget, which of the following statements is correct?

Detailed Solution for Business Economics Mock Test - 4 - Question 12

Budget is a statement of expected annual receipts and expenditures of the government.

Business Economics Mock Test - 4 - Question 13

Which of the following is not concerned with the problem of choice

Detailed Solution for Business Economics Mock Test - 4 - Question 13

The problem of choice is concerned with how limited resources are rationally allocated to alternative uses when consumers and producers have unlimited wants.

Business Economics Mock Test - 4 - Question 14

Which of the following is a commonly accepted definition of money?

Detailed Solution for Business Economics Mock Test - 4 - Question 14

Any commodity that is accepted as a medium of exchange is money. 

Business Economics Mock Test - 4 - Question 15

A borrower comes into the bank and pays off 10,000 Rupees of his loan. This was a cash payment by the borrower to the bank. What was the immediate effect on the nation’s money supply?

Detailed Solution for Business Economics Mock Test - 4 - Question 15

The money supply decreased by 10,000 Rupees. While the cash was in the borrower’s possession, it was part of the nation’s money supply. As a reserve in a bank, it is not included in the money supply.

Business Economics Mock Test - 4 - Question 16

The limits imposed on household choices by income, wealth, and product prices are captured by the 

Detailed Solution for Business Economics Mock Test - 4 - Question 16

Budget constraint captures the limits imposed on household choices by income, wealth, and product prices.

Business Economics Mock Test - 4 - Question 17

Differences between closing stock and opening stock during an accounting year are known as: 

Detailed Solution for Business Economics Mock Test - 4 - Question 17

Change in stock refers to the difference between opening and closing stock. 

Business Economics Mock Test - 4 - Question 18

The positively sloped (i.e. rising) part of the long run average total cost curve is due to which of the following?

Detailed Solution for Business Economics Mock Test - 4 - Question 18

The positively sloped (i.e. rising) part of the long run average total cost curve is due to diseconomies of scale

Business Economics Mock Test - 4 - Question 19

Q. Refer to the table mentioned above. What is the real GDP in year 3?

Detailed Solution for Business Economics Mock Test - 4 - Question 19

Real GDP = Nominal GDP/GDP deflator
=(5,000/125)×100=4,000

Business Economics Mock Test - 4 - Question 20

___ is that period of time in which some factors are fixed and some are variable.

Detailed Solution for Business Economics Mock Test - 4 - Question 20

In the short run, there are both fixed and variable factors.

Business Economics Mock Test - 4 - Question 21

The market price of a pizza is Rs 300. Corresponding to an output of 120 units, the average total cost of producing a pizza is Rs 250. Calculate his total profit at this output level.

Detailed Solution for Business Economics Mock Test - 4 - Question 21

Profit=(P−SAC)×q
=(300−20)×120
= Rs 6000

Business Economics Mock Test - 4 - Question 22

Value-added method measures the contribution of which of the following within the domestic territory of a country?

Detailed Solution for Business Economics Mock Test - 4 - Question 22

The producing enterprises owned by the non-residents of the country and he producing enterprises owned by residents of the country are included in the value-added method. 

Business Economics Mock Test - 4 - Question 23

A higher GDP per capita may not mean that the quality of life has really improved because

Detailed Solution for Business Economics Mock Test - 4 - Question 23

It measures the income generated but not the quality of the products; items may be better quality but cheaper to produce so GDP would fall.

Business Economics Mock Test - 4 - Question 24

Which of the following does not come under quantitative methods of monetary policy?

Detailed Solution for Business Economics Mock Test - 4 - Question 24

Moral suasion is a qualitative method, and other options are quantitative methods of monetary policy.

Business Economics Mock Test - 4 - Question 25

Which of the following statement is true?

Detailed Solution for Business Economics Mock Test - 4 - Question 25

Borrowing by a government represents a situation of fiscal deficit. 
Borrowing by a government represents a situation of fiscal deficit. 

Business Economics Mock Test - 4 - Question 26

Fiscal Responsibility and Budget Management Act (FRBMA) ACT 2003 concerns:

Detailed Solution for Business Economics Mock Test - 4 - Question 26

The FRBMA was adopted to ensure complete fiscal stability in the economy.

Business Economics Mock Test - 4 - Question 27

A fall in own price of the commodity leads to:

Detailed Solution for Business Economics Mock Test - 4 - Question 27

A fall in own price of the commodity leads to increase in real income of the consumer and a consquent increase in purchasing power of the consumer.

Business Economics Mock Test - 4 - Question 28

Consumption of all goods and services in the economy during the period of an accounting year is known as :

Detailed Solution for Business Economics Mock Test - 4 - Question 28

Consumption of all goods and services in the economy during the period of an accounting year is called aggregate consumption. 

Business Economics Mock Test - 4 - Question 29

In case of a natural calamity such as an earthquake, money can be withdrawn from the:

Detailed Solution for Business Economics Mock Test - 4 - Question 29

In case of a natural calamity such as an earthquake, money can be withdrawn from the Contingency Fund of India. 

Business Economics Mock Test - 4 - Question 30

Companies pay Corporate Tax on their:

Detailed Solution for Business Economics Mock Test - 4 - Question 30

Corporate taxes are levied on company’s profits.

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