MH SET Paper 2 Mock Test - 5 (Commerce) - MAHA TET MCQ

Key Points

• A stereotype is a fixed, overly generalised belief about a certain group or class of people that is used in social psychology.
• Stereotyping implies that an individual possesses a wide range of characteristics and abilities that we presume all members of that group share.
• For instance, a "hells angel" biker wears leather clothing.

Important Points

Stereotyping: 

• A stereotype is a preconceived idea that is fixed and overly generalised about a certain group or class of individuals.
• These presumptions rest on the false assumption that each member of the group shares a particular set of traits.
• Many stereotypes are a direct result of numerous political, social, or economic events and have a lengthy and occasionally contentious history.
• Making assumptions about a person or group of individuals based on criteria such as gender, race, religion, or physical characteristics is known as stereotyping.

Additional Information

1. Halo effect: A form of cognitive bias known as the "halo effect" occurs when our overall opinion of a person affects how we feel and think about their character. In essence, your assessment of a person's general impression ("He is kind!") affects your assessment of that person's specific characteristics ("He is also brilliant!"). People's perceptions of one quality can influence their perceptions of other characteristics. Our perception of celebrities as a whole is a terrific illustration of the halo effect in action. People prefer to view them as bright, kind, and amusing since they are viewed as attractive, successful, and frequently likeable.
2. Attribute: The word "pay tribute" and "attribute" have a similar meaning. In this way, a prize winner who honours a motivational lecturer is in a way crediting her success to the professor.
3. Assimilation: In anthropology and sociology, assimilation refers to the process through which people or groups with different ethnic ancestries are assimilated into the dominant culture of a society.

The correct answer is "Indirect communication among sellers and potential buyers".

Key Points

• The goal of promotion is to communicate to consumers that they need this product and that it is priced appropriately.
• Promotion encompasses advertising, public relations, and the overall media strategy for introducing a product.
• Promotion is a marketing tool, used as a strategy to communicate between the sellers and buyers.
• Through this, the seller tries to influence and convince the buyers to buy their products or services. ​

Additional Information

• It assists in spreading the word about the product or services or company to the people.
• The company uses this process to improve its public image.
• This technique of marketing creates an interest in the mindset of the customers and can also retain them as a loyal customer.
• Promotions tend to focus on how to attract the attention of consumers and motivate them to take action or make a purchase via eCommerce or other channels.
• Ensure the right consumers are reached and objectives are met.
• In order to accomplish this, brands must look closely at the many ways to market/promote and decide which methods are most likely to reach the desired consumer demographic. 

LIFO method of inventory valuation results in lower valuation of inventory and low income when inflation is on the rise

LIFO is a method used to account for inventory. Under LIFO, the cost of the most recent products purchased (or produced) are the first to be expensed. LIFO is used only in the United States and governed by the generally accepted accounting principles (GAAP).

The correct answer is "One way communication".

Key Points

• Personal selling is a part of promotional- mix and it is an art of person-to-person communication for persuading prospects or consumers in the sales process. For introducing effective marketing system, balancing of other marketing elements like, product development, pricing, distribution system, advertising etc. should be organised along with implementation of personal selling methodology.
• Advertising is a marketing tactic involving paying for space to promote a product, service, or cause. The actual promotional messages are called advertisements, or ads for short. The goal of advertising is to reach people most likely to be willing to pay for a company's products or services and entice them to buy.
• Role of advertising and personal selling is:
  • ​Persuading prospects - Sales representatives use their personal selling skills to increase the chances of a successful sale. They aim to understand a prospect’s needs and offer a solution to those needs in the form of a product or service that provides strong benefits and represents value for money. If prospects pose objections, sales representatives use their powers of persuasion to overcome the objections and convince prospects that they are making the right choice by buying a product or service.
  • Selling complex products - Companies that sell complex products must be able to demonstrate or explain products to potential customers and answer questions or queries. Sales representatives can present products in a logical way, focusing on the benefits that are relevant to different decision-makers, such as technical managers, purchasing officers or finance executives. Representatives use their experience to gauge a prospect’s response to their sales pitch and adjust their presentation to individual prospects’ levels of understanding or interest.
  • Managing the sales cycle - Personal selling is important to companies marketing products that require a long sales cycle. In business-to-business marketing, prospects move through a buying process that involves a number of stages, including identification of a need, development of a specification, selection of potential suppliers, evaluation of suppliers’ offerings and a final purchasing decision.
  • Two way communication - Personal selling is best tools for two-way communication. salesman can provide necessary information to customer about company’s offer, and also can collect information from customer. customer can actively with salesman to solve his doubts and objections

• Principles of Political Economy and Taxation is a book by David Ricardo on economics, published in 1817.
• The General Theory of Employment, Interest, and Money was written by the English economist John Maynard Keynes, published in 1936.
• Value and Capital is a book by the British economist John Richard Hicks, published in 1939.
• Revision of Demand Theory was first published in 1956 written by the late Harry Johnson.

• The Section 80D deduction in the Income Tax Act, of 1961 allows a deduction of up to Rs.25,000 per year for medical insurance premium installments.
• The policy can be for you, your spouse, or your children.
• If you or your spouse are senior citizens (60 years or more), the deduction limit will go up to Rs.50,000.

The correct answer is A ‐ lV, B ‐ lll, C ‐ ll, D ‐ l.

Key PointsGoods - Section 2(7) of the Sale of Goods Act, 1930 defines "goods" to include all transportable property types, such as stocks, shares, crops, grass, severable objects, etc.

Important PointsActionable claim-  Any debt that is connected to a benefit derived from movable property that is not in possession and for which relief can be sought in civil court is referred to as a "actionable claim." Further It means that if no action is made to realise the claim, it cannot be regarded to be an actionable claim for the reason that no action was taken to realise it.

Appropriation of goods- Appropriation of goods under the sale of goods act,1930 as follows -

1. Deliver as per description - The property in the goods passes to the buyer when there is a contract for the sale of undetermined or future goods by description and goods matching that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the buyer's consent or by the buyer with the seller's consent. Before or after the appropriation is made, this assent may be given and may be expressed explicitly or inferred. 
2. Delivery to carrier - When the seller delivers the products to the buyer, a carrier, or another bailee (whether or not identified by the buyer) in accordance with the contract and does not reserve the right to dispose of the goods, he is understood to have unreservedly appropriated the goods to the contract.

Existing goods- According to section 6 of sales of goods act 1930,those goods as are existence at the time of the contract of sale or those goods owned or possessed by the seller at the time of contract of sale. There are three types of existing goods - 

• Specific Goods 
• Ascertained Goods
• Unascertained Goods

Future goods - According to Section 2(6) of Sales of goods Act 1930, those goods are to be manufactured or produced or acquired by seller after making of contract of Sale. For examples, A agrees to B to sell all wheats to be produced in his field this years.

The correct answer is Both the statements I and II are correct.

Key Points

• The UNCTAD developed Transnationality Index (TNI), it is a means of ranking multinational corporations that is employed by economists and politicians.
• It is calculated as the arithmetic mean of the following three ratios (where "foreign" means outside of the corporation's home country): the ratio of foreign assets to total assets, The ratio of foreign sales to total sales, the ratio of foreign employment to total employment.
• The Transnationality Index was developed by the United Nations Conference on Trade and Development.

Hence, the correct option is Both the statements I and II are correct.

In PLC, the introduction stage is a period of slow sales growth as the product is introduced in the market, profits are nonexistent because of the heavy expenses of product introduction. In this stage, promotional expenditure are at their highest ratio to sales because of the need to:

(1) inform potential consumers

(2) induce product trial and

(3) secure distribution in retail outlets

The correct answer is Psychological elements.

Key Points

• In the passage, "On an internal level, psychological factors such as perception, motivation, and attitudes play a pivotal role in shaping an individual's response to marketing stimuli."
• The passage explicitly states that psychological factors are internal elements shaping consumer behavior, supporting option 3.
• The other options (1. Cultural influences, 2. Economic considerations, 4. Environmental factors) do not accurately reflect the internal factors mentioned in the passage.

Additional InformationThe mention of perception, motivation, and attitudes as psychological factors provides a more detailed understanding of the internal elements influencing consumer behavior.

The correct answer is It has raised ethical concerns in data privacy.

Key Points

• In the passage, "However, this sophistication comes with its own set of challenges, as navigating the ethical considerations of data privacy and the potential for manipulation requires careful scrutiny."
• The passage mentions that big data has raised ethical concerns in data privacy, aligning with option b.
• The other options (1. It has simplified the analysis of small datasets, 3. It is ineffective in discerning patterns and trends, 4. It has limited applications in marketing) do not accurately represent the challenges associated with big data, as described in the passage.

The correct answer is Personality traits and values

Key Points

• In the passage,"Psychographic segmentation, for instance, seeks to categorize consumers based on their values, lifestyles, and personality traits."
• Psychographic segmentation is explicitly mentioned as focusing on values, lifestyles, and personality traits.
• Therefore, option c, "Personality traits and values," is the correct answer.

Additional Information The other options (1. Geographic factors, 2. Economic variables, 4. Technological preferences) are not aligned with the specific aspects mentioned in the passage regarding psychographic segmentation.

• Economic crisis is a severe and sudden upset in any part of the economy. It could be a stock market crash, a spike in inflation or unemployment, or a series of bank failures.
• The IMF oversees the stability of the world's monetary system, while the World Bank's goal is to reduce poverty by offering assistance to middle-income and low-income countries
• In 1991, India met with an economic crisis relating to its external debt. India approached the International Bank for Reconstruction and Development (IBRD), popularly known as World Bank and the International Monetary Fund (IMF), and received $7 billion as loan to manage the crisis. Therefore Option 3 is the correct answer.

The correct answer is b, c, a, d.

Key Points

As per the passage:

The passage doesn't explicitly relay this sequence. However, logical deduction considering the evolution of AI first leads to job displacement, which in turn necessitates adept professionals (AI specialists), followed by the realization for ethical regulations (AI Ethicists), and finally, a stage of human roles being complemented by AI in non-repetitive tasks.

The correct answer is Both Assertion and Reasoning are correct and Reasoning is the correct explanation for Assertion.

Key Points

As per the passage:

The sentence, "AI-driven automation could potentially replace repetitive and manual roles, leading to job displacement," demonstrates that automating repetitive and manual tasks using AI like Chat GPT could indeed displace jobs, making both the assertion and the reasoning correct.

Purchase Consideration:

In the case of amalgamation, purchase consideration is the agreed amount that the transferee company (Purchasing company) pays to the transferor company (Vendor company) in exchange of the ownership of the transferor company. It may be in form of cash, shares, or any other assets as agreed between both companies.

Key-Points

Methods of Purchase Consideration:

There are four various methods that can be used in this calculation:

1. Net asset method:

The purchase consideration is equal to the total net assets of the transferor company.

The total agreed amount of asset – Total agreed amount of liabilities

2. Net payment method:

Payment made to the shareholders of the transferor company in form of cash, shares, or debentures.

3. Lump-sum method:

Fixed amount paid by the transferee company to the transferor company. This method does not require any calculation as the amount is decided by the mutual consent of both companies.

4. Intrinsic value/ Share exchange method:

It is calculated by dividing the net asset value of the transferor company by the price of one share of the transferee company.

The resulting figure then divided by the number of existing shares of the transferor company to find out the ratio.

Therefore, Gross Receipts Method is NOT a method for calculating or ascertaining the amount of purchase consideration.

The correct answer is An offer given to any number of people until is retracted

An offer is defined under Section 2(a) of The Indian Contract Act as:

• "When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal."

Important Points

• When a general offer is of continuing nature, it can be accepted by a number of people till it is retracted.
• However, when a similar offer requires information regarding a missing thing, it is closed as soon as the first information comes in.

Therefore, the correct answer is Option 2.

The Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services.

The wholesalers primarily use Personal selling as the key promotional mix strategy.

Legal relationship between the middleman and the businessperson is governed by the law of agency.

The agency is the agreement in which one party entrusts another party to conduct business on their behalf. The agency agreement comes in the following forms: Express agreement (both oral and written) Implication.

The correct answer is Neither (i) nor (ii)

Key Points

•  Neither the level of labor (i) nor capital (ii) is constant along an isoquant.
• An isoquant represents all combinations of two inputs, often labor (L) and capital (K), that yield the same level of output. Therefore, the only thing that remains constant along an isoquant is the quantity of output produced.
• As you move along an isoquant, the amounts of labor and capital used in production change, but the total output remains the same. For instance, a firm may decide to use more labor and less capital, or vice versa, but if it is still on the same isoquant, the total level of output will be constant.

Important Points Here are some additional points about isoquants:

1. Shape: Isoquants, similar to indifference curves in consumer theory, are downward-sloping and convex to the origin. This represents the tradeoff between the two inputs—capital and labor—and reflects the principle of diminishing marginal returns.
2. Marginal Rate of Technical Substitution (MRTS): The slope of the isoquant at any point is known as the MRTS. This refers to the ratio at which a firm can substitute between two inputs while maintaining the same level of output.
3. Contour Lines of a Production Function: Just as topographical maps have contour lines indicating different elevations, isoquants can be thought of as contour lines of a production function. Each isoquant represents a particular level of output.
4. Isoquant Map: A map of isoquants for different levels of output is known as an isoquant map.
5. Non-intersection: No two isoquants can intersect each other. Each isoquant corresponds to a different level of output, meaning a point cannot simultaneously yield two different levels of output.
6. Distance from the Origin: Isoquants that are further from the origin represent higher levels of output, just as indifference curves further from the origin represent higher levels of utility.

The concept of isoquants is fundamental for understanding how firms make decisions about the optimal combination of inputs, given their prices, to produce a certain level of output. This decision, made at the point where the isoquant is tangent to the firm's budget constraint, plays a crucial role in cost minimization and profit maximization.

Additional Information An isoquant is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. It is a graphical representation of a production function, often used to depict the combination of inputs (usually capital and labor) that will produce a certain level of output.

The term "isoquant" comes from the prefix 'iso' meaning 'equal' and 'quant' referring to quantity. Therefore, an isoquant represents all combinations of inputs that yield the same ("iso") quantity ("quant").

Key characteristics of isoquants include:

• They are downward sloping (from left to right), representing that if the use of one input decreases, the use of another input must increase to maintain the same level of output.
• They are convex to the origin. This characteristic reflects the law of diminishing marginal rates of technical substitution, which states that as more of one input is used, keeping output constant, increasingly larger amounts of the other input must be given up.
• Isoquants cannot intersect. Each isoquant represents a different level of output, and a point in space cannot correspond to two different levels of output.
• The farther an isoquant is from the origin, the greater the level of output it represents.

The correct answer is Both (A) and (R) are true and (R) is the correct explanation of (A).

Key Points

• Assertion (A): SEBI issues guidelines for all companies for the disclosure of information and protection of investors' interests.
  • ​To make available details relevant to an investment in the public domain, the Securities and Exchange Board of India has adopted a disclosure-based regulatory regime.
  • Under this regime, issuers and intermediaries disclose relevant details about themselves, the products, the market, and the regulations so that the investor can make informed investment decisions based on such disclosures.

Thus, the assertion is correct.

• Reason (R): Computerised screen-based trading has been introduced on all major stock exchanges.
  • The screen-based trading system enables distant trade participants to trade with each other, improving the liquidity of the securities markets.
  • The high speed with which the exchange of securities is executed and the large number of participants who can trade simultaneously facilitate faster incorporation of price-sensitive information into prevailing prices.
  • The screen-based trading system ensures transparency and helps in fixing the prices efficiently, because of the efficiency of information dissemination.

Thus, the reason is correct.

Screen-based trading in stock exchanges facilitates efficient disclosure of information and protection of investors' interests.

On the basis of the above information, it can be concluded that both assertion and reason are true and the reason is the correct explanation of the assertion.

When ratios are calculated from financial statements of one year, it is termed as Ratio Analysis.

Ratio Analysis refers to the process of establishing financial ratios from a financial statement of one year to find out the financial performance of a company. Ratio Analysis are classified into three types:

1. Profitability ratios

2. Efficiency / Operating ratios

3. Liquidity ratios

The International Monetary Fund (IMF) is an agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries at the Bretton Woods Conference in 1944. Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world."

Various IMF facilities available to member countries include Reserve Tranche, Credit Tranches, Stand-By Arrangements, Extended Fund Facility (EFF), Compensatory and Contingency Financing Facility, Buffer Stock Financing Facility, Supplemental Reserve Facility (SRF) and Enhanced Structural Adjustment Facility (ESAF) etc.

Key Points

A few IMF facilities available to member countries are explained below:

1. Stand-By Arrangements.

• Stand-By Arrangements give members the right to draw up to a specified amount of IMF resources during a prescribed period.
• Drawings are normally phased on a quarterly basis, with their release conditional upon meeting performance criteria and the completion of periodic reviews.
• Stand-By Arrangements typically cover a 12–18-month period (although they can extend up to three years). Repayments are to be made within 3¼ to 5 years of each drawing.

2. Extended Fund Facility (EFF).

• The EFF provides assistance for adjustment programs over longer periods and with generally larger amounts of financing than understand-by arrangements.
• Extended arrangements, which normally run for three years (and can be extended for a fourth), are designed to rectify balance of payments difficulties that stem largely from structural problems and require a longer period of adjustment.

3. Compensatory and Contingency Financing Facility.

• The export compensatory element of the CCFF provides timely financing to members experiencing a temporary shortfall in export earnings or an excess in cereal import costs, attributable to factors largely beyond the member’s control.
• This element of the facility has been used particularly by commodity exporters.
• The contingency element helps members with IMF arrangements keep their adjustment programmes on track when faced with unexpected adverse external shocks.

Therefore, we conclude that the correct answers are A, C and D only

Additional Information

• Structural adjustment programs (SAPs) :
  • A World Bank programme was established in 1980 to enhance a country's long-term economic growth through financing projects.
  • Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs) provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experience economic crises.

In the Perceived-Value Pricing method, a firm sets the price of a product by considering what product image a customer carries in his mind and how much he is willing to pay for it. In other words, pricing a product on the basis of what the customer is ready to pay for it, is called Perceived-value pricing.

Key-Points

A unimodal distribution:

• A unimodal distribution has only one clear peak.
• Initially, the value goes on increasing up to a certain highest point and then starts decreasing.
• A unimodal distribution can either be symmetric or unsymmetric distribution. 

A symmetric distribution:

• A symmetric distribution is where all the values of mean, median, mode are equal.
• In such distribution, the interval of gains and losses display the same frequency.
• A distribution that differs from symmetrical distribution is known as unsymmetrical distribution and that is where we get positive skewness and negative skewness.

If the distribution is symmetric then the mean is equal to the median and the distribution will have zero skewness. And in addition to this, if the distribution is unimodal then mean = median = mode.

Therefore, in a unimodal and symmetric distribution, the relationship between averages is like mean = median = mode.

Key Points

Taking care of the welfare of employees by companies, unions, governmental and non-governmental institutions and agencies is referred to as labour welfare.

Important Points

Thus, the correct match is A - 4, B - 3, C - 1, D - 2.