2nd Session - GENERAL ECONOMICS & QUANTITATIVE APTITUDE

"Get reasons for the correct answer as well as the reasons for incorrect options as to why they are incorrect. Reasoning compiled by All India CA Rankers"


Q1. With an increase in the price of diamond, its demand also increases. This is because it is a:

A. substitute good
B. complementary good
C. conspicuous good
D. none of these
See Answer

Choice "C" is correct as
Articles of prestige value or snob appeal or articles of conspicuous consumption are demanded only by the rich people and these articles become more attractive if their prices go up. Such articles will not conform to the usual law of demand. If the commodity is expensive they think that it has got more utility. As such, they buy less of this commodity at low price and more of it at high price. Diamonds are often given as example of this case. Higher the price of diamonds, higher is the prestige value attached to them and hence higher is the demand for them.
Choice "A" is incorrect as
Competing goods or substitutes are those goods which can be used with ease in place of one another. For example, tea and coffee, ink pen and ball pen, are substitutes for each other and can be used in place of one another easily. When goods are substitutes, a fall in the price of one (ceteris paribus) leads to a fall in the quantity demanded of its substitutes. For example, if the price of tea falls, people will try to substitute it for coffee and demand more of it and less of coffee i.e. the demand for tea will rise and that of coffee will fall.
Choice "B" is incorrect as
Complementary goods are those goods which are consumed together or simultaneously. For example, tea and sugar, automobiles and petrol, pen and ink are used together. When commodities are complements, a fall in the price of one (other things being equal) will cause the demand of the other to rise.
Choice "D" is incorrect as
Articles of prestige value or snob appeal or articles of conspicuous consumption are demanded only by the rich people and these articles become more attractive if their prices go up. Such articles will not conform to the usual law of demand.

Q2. All but one of the following are assumed to remain the same while drawing an individual demand curve for a commodity. Which one is it?

A. The preference of the individual
B. His monetary income
C. Price
D. Price of related goods
See Answer

Choice "C" is correct as
The demand curve shows the quantity of X that a consumer would like to buy at each price; its downward slope indicates that the quantity of X demanded increases as its price falls. Thus the downward sloping demand curve is in accordance with the law of demand which, as stated above, describes an inverse price-demand relationship.
Choice "A" is incorrect as
The demand for a commodity also depends upon tastes and preferences of consumers and changes in them over a period of time. Goods which are more in fashion command higher demand than goods which are out of fashion.
Choice "B" is incorrect as
Other things being equal, the demand for a commodity depends upon the money income of the household. In most cases, the larger the average money income of the household, the larger is the quantity demanded of a particular good.
Choice "D" is incorrect as
The demand for a particular commodity may change due to changes in the prices of related goods. These related goods may be either complementary goods or substitute goods.

Q3. National income doesn't include

A. Interest on unproductive national debt
B. Income for government expenditure
C. The payments by the household to firm for the purchase of goods and services
D. Undistributed profits
See Answer

Choice "A" is correct as
National income doesn't include those income's that doesn't have the provision of a good or a service as a counterpart, like: Subsidies Child benefits, Retirement pensions etc. Government raises loans from the people or World bank to meet war and other unproductive expenditure. Consequently there is no change in flow of goods and services Hence the interest on such loan is not treated as factor income, rather it is like transfer payment
Choice "B" is incorrect as
We can calculate National Income of a country using Expenditure method, in which expenditure on financial assets, on goods produced in preceding periods, on raw materials and intermediate goods and services and on final goods and services produced in the current period by the various sectors - household sector, business sector and government sector are included.
Choice "C" is incorrect as
We can calculated National Income of a country using Expenditure method, in which expenditure incurred on procuring financial assets, on goods produced in preceding periods, on raw materials and intermediate goods and services and on final goods and services produced in the current period by the various sectors - household sector, business sector and government sector are included.
Choice "D" is incorrect as
Undistributed Profits, commonly termed retained earnings are corporate profits that are neither paid as corporate profits taxes nor paid to shareholders as dividends. It is that part of income that is earned by the shareholders but not received, it falls in the general category of income earned but not received (IEBNR), and is subtracted from national income in the derivation of personal income.

Q4. Total cost in the short run is classified into fixed costs and variable costs. Which one of the following is a variable cost?

A. Cost of raw materials
B. Cost of equipment
C. Interest payment on past borrowings
D. Payment of rent on building
See Answer

Choice "A" is correct as
Variable costs are those which increases with increase in the level of output produced. Cost of raw material is a variable cost as it increases with the increase in level of production.
Choice "B" is incorrect as
Fixed costs are those which never changes with the change in the level of output produced. Cost of equipment is an one time expenditure and does not change with the change in the level of output.
Choice "C" is incorrect as
Interest payment on past borrowing is of fixed nature.
Choice "D" is incorrect as
Payment of rent on building is of fixed nature.

Q5. _________ is a systematic record of all economic transactions between one country and rest of the world

A. Balance of trade
B. Balance of transactions
C. Budget
D. Balance of payments
See Answer

Choice "D" is correct as
The Balance of Payments (BOP) is one of the oldest and most important statistical statements for any country. It is a systematic record of all economic transactions between the residents of one country and the residents of the rest of the world in a year. Since we merely record all receipts and payments in international transactions using double entry system, the balance of payments always balance in an accounting sense.
Choice "A" is incorrect as
Balance of Trade may be defined as the difference between the value of goods sold to foreigners by the residents and firms of the home country and the value of goods purchased by them from foreigners.
Choice "B" is incorrect as
Balance of transaction is just a part of balance of payment.
Choice "C" is incorrect as
A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.

Q6. A straight downward sloping indifference curve means

A. MRS is constant
B. MRS is increasing
C. MRS is decreasing
D. MRS is Zero
See Answer

Choice "A" is correct as
When two goods are perfect substitutes of each other, the indifference curve is a straight line on which MRS is constant. If two goods are perfect substitutes then the indifference curves will have a constant slope since the consumer would be willing to switch between at a fixed ratio. e.g Writeable compact disks from different manufacturers are often considered to be perfect substitutes. As the price of one brand of CD rises, consumers will be expected to substitute other brands of CD in a one-to-one fashion. This means that the total quantity of CDs purchased would not change.
Choice "B" is incorrect as
If indifference curve was concave to the origin it would imply that the marginal rate of substitution of X for Y has increased as more and more of X was substituted, for Y.
Choice "C" is incorrect as
Diminishing marginal rate of substitution implies as more and more of one commodity (X) is substituted for another (Y), the consumer is willing to part with less and less of the commodity being substituted (i.e. Y).
Choice "D" is incorrect as
When two goods are unrelated, then MRS of x y will be zero.

Q7. __________ provides crop storage facility in India

A. IDBI
B. FCI
C. ICICI
D. IFCI
See Answer

Choice "B" is correct as
Food Corporation of India was set up on 14 January 1965 having its first District Office at Thanjavur - rice bowl of Tamil Nadu - and headquarters at Chennai under the Food Corporations Act 1964 to implement the following objectives of the National Food Policy:
1) Effective price support operations for safeguarding the interests of the farmers.
2) Distribution of food grains throughout the country for Public Distribution System.
3) Maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security.
4) Regulate market price to provide food grains to consumers at a reliable price.
Choice "A" is incorrect as
IDBI was established to provide credit and other financial facilities for the development of the fledgling Indian industry.
Choice "C" is incorrect as
ICICI provides project financing to Indian industry.
Choice "D" is incorrect as
IFCI was formed to cater to the long-term finance needs of the industrial sector. It was the first Development Financial Institution established by the Indian government after independence.

Q8. The policy of the government with regards to its revenue and expenditure is called

A. Monetary policy
B. Trade policy
C. Economic policy
D. Fiscal policy
See Answer

Choice "D" is correct as
Fiscal measures are the measures taken by the government with regard to taxation, expenditure and public borrowings.
Choice "A" is incorrect as
Monetary policy is the macro economic policy laid down by central bank. It involves management of money supply and interest rates.
Choice "B" is incorrect as
A commercial policy (also referred to as a trade policy or international trade policy) is a set of rules and regulations that are intended to change international trade flows, particularly to restrict imports.
Choice "C" is incorrect as
Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labor market, national ownership, and many other areas of government interventions into the economy.

Q9. The term under development implies:-

A. Social institutions are very backward
B. Low per capita real income
C. High level of economic and technological backwardness
D. High population growth
See Answer

Choice "C" is correct as
An underdeveloped country is one which is characterized by: mass poverty which is chronic and not the result of some temporary misfortune(economic backwardness) and obsolete methods of production (technological backwardness) which means that poverty is not entirely due to poor natural resources and hence could presumably be lessened by methods already proved in other countries.
Choice "A" is incorrect as
When social life of people is traditional and people are generally orthodox in their outlook and seldom make any changes in their socio-economic relations, it is not the sole criteria for a country to be under developed. It is to be coupled with other characteristics like low level of per capita and under utilisation of resources which makes a country underdeveloped.
Choice "B" is incorrect as
According to the United Nations experts, an underdeveloped country is one in which per capita real income is low when compared with the per capita real income of the United States of America, Canada, Australia and Western Europe. But poverty is not always an adequate criterion to judge whether a country is developed or under developed. For a country to be called under-developed there must be unutilised or under-utilised natural resources which may be used for production to raise per capita income and standards of living of the people. If the resources of a country are mearge and scanty then even after having fully developed them, it will remain poor.
Choice "D" is incorrect as
High population rate does not make a country undeveloped, What if it has adequate economic and social infrastructure to support the increasing population.

Q10. Economists who are concerned about the behaviour of individual households, firms and industries are studying:

A. Microeconomics
B. Macroeconomics
C. Noneconomic
D. None of the above
See Answer

Choice "A" is correct as
According to Prof. Boulding, "Micro economics is the study of particular firms, particular households, individual price, wages, income, individual industries and particular commodities".
Choice "B" is incorrect as
Macro economics is the study of aggregates not individuals
Choice "C" is incorrect as
Non-economic activities do not involve any economic motive (like earning profit).Eg. A teacher teaches her daughter. In this case teacher has no economic motive behind her work.(Flow of income does not change with this act).
Choice "D" is incorrect as
Option A is correct, this option becomes invalid.

Q11. In which of the following types of market structure are advertise expenses the least?

A. Monopoly
B. duopoly
C. monopolistic competition
D. oligopoly
See Answer

Choice "A" is correct as
In a monopoly market, there is only one firm producing or supplying a product. This single firm constitutes the industry and as such there is no distinction between firm and industry in a monopolistic market. Generally he sells a product which has no close substitutes. In such a case, the cross elasticity of demand for the monopolist's product and any other product is zero or very small. Thus, he need incur any advertising expenses to combat competition.
Choice "B" is incorrect as
Duopoly is a form of oligopoly where two sellers dominate the market. As only two sellers dominate the market, they undertake aggressive selling and advertising expenses to combat rigorous competition.
Choice "C" is incorrect as
In a monopolistically competitive market, sellers try to compete on bases other than price, as for example aggressive advertising, product development, better distribution arrangements, efficient after-sales service, and so on. A key base of non-price competition is a deliberate policy of product differentiation. Sellers attempt to promote their products not by cutting prices but by incurring high expenditure on publicity and advertisement and other sales promoting techniques.
Choice "D" is incorrect as
A direct effect of interdependence of oligopolists is that the firms have to employ various aggressive and defensive marketing weapons to gain a greater share in the market or to maintain their share. For this, firms have to incur a good deal of costs on advertising and other measures of sales promotion. Therefore, there is great importance for advertising and selling costs in an oligopoly market.

Q12. Opportunity costs always known as-

A. Spill over cost
B. Money cost
C. Alternative cost
D. None of the above
See Answer

Choice "C" is correct as
Opportunity cost is concerned with the cost of foregone opportunity. It involves a comparison between the policy that was chosen and the policy that was rejected. For example, the opportunity cost of using capital is the interest that it can earn in the next best use with equal risk. That is why Opportunity cost is also known as alternative cost.
Choice "A" is incorrect as
"Spillover cost," also known as "negative externality," is a term used to describe some loss or damage that a market transaction causes a third party. The third party ends up paying for the transaction in some way, even though it was neither the buyer nor the seller and had no part in the original decision.
Choice "B" is incorrect as
When production cost is expressed in terms of monetary units, it is called money cost. It means the aggregate money expenditure incurred by a producer on the purchase, procurement and processing of inputs.
Choice "D" is incorrect as
Option C is correct so this option is not valid.

Q13. The law of equal marginal utility is one of the laws within whose parameters marginal utility analysis is framed. The other one is

A. Law of diminishing marginal utility
B. Law of proportions
C. Law of consumer surplus
D. Law of increasing returns
See Answer

Choice "A" is correct as
The law of equi marginal utility was presented in 19th century by an Australian economist's H. H. Gossen. It is also known as law of maximum satisfaction or law of substitution or Gossen's second law. It states that "A person can get maximum utility with his given income when it is spent on different commodities in such a way that the marginal utility of money spent on each item is equal. The law of equi marginal utility is an extension of the law of diminishing marginal utility. Whereas 'Law Of Diminishing Marginal Utility' states that when a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product. Hence with the help of both the laws, law of equi marginal utility and Law of Diminishing Marginal Utility, marginal utility analysis is framed.
Choice "B" is incorrect as
The law of variable proportions states that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline. This means that upto the use of a certain amount of variable factor, marginal product of the factor may increase and after a certain stage it starts diminishing. When the variable factor becomes relatively abundant, the marginal product may become negative.
Choice "C" is incorrect as
Marshall defined the concept of consumer surplus as the excess of the price which a consumer would be willing to pay rather than go without a thing over that which he actually does pay, is called consumers surplus. Thus consumers surplus = What a consumer is ready to pay - What he actually pays.
Choice "D" is incorrect as
The law of increasing return signifies that cost per unit of the marginal or additional output falls with the expansion of an industry. As more and more units of the commodity are produced, the cost per unit goes on steadily falling.

Q14. Labour is-

A. Active factor
B. Passive factor
C. Alternative factor
D. None of these
See Answer

Choice "A" is correct as
Labour is defined as the human effort done mentally or physically with the aim of earning income. In the production process, labour is the mental and physical effort of human being. That is why, labour is the active factor.
Choice "B" is incorrect as
Passive factor of production is Land. Passive factor in itself can not make production possible. It is the Labour which in cooperation with land make production possible.
Choice "C" is incorrect as
Capital is the alternative factor of product. Capital has replaced labour in the production process in the form of efficient machines. Same amount of goods can be produced with less number of labour with the help of machines that is alternative factor.
Choice "D" is incorrect as
Option C is correct so this option is not valid.

Q15. Land in economics, means-

A. Material and non-material goods
B. Mineral under the surface of earth
C. All natural resources available to man for producing wealth.
D. All the above
See Answer

Choice "D" is correct as
In economics Land is considered as a resource that encompasses the natural resources (material and non material) used in production. Land is defined as everything in the universe that is not created by human beings. Air sunlight, forest, earth, water are all classified as land which are also called as original or primary factor of production.
Choices "A", "B" and "C" are incorrect as
These options are individually correct. But, choosing only one option would not complete our answer.

Q16. Gini index for India is:

A. 0.368
B. 35
C. 30.2
D. 1.5
See Answer

Choice "A" is correct as
According to the Human Development Report - 2010, the Gini index for India for the period 2000-10 was 0.368.
Choices "B", "C" and "D" are incorrect as
The distribution of income and wealth in India is not equitable. In order to measure the inequality of income and wealth, generally Gini index is used. The Gini index measures the extent to which distribution of income/consumption among individuals or households within an economy deviates from a perfectly equal distribution. A Gini index of zero represents perfect equality while an index of one represents perfect inequality. The Gini coefficient lies between 0 and 1. According to the Human Development Report - 2010, the Gini index for India for the period 2000-10 was 0.368.

Q17. What are the problems posed by urbanization?

A. Growth of slums in cities
B. Lack of amenities
C. Problems of civic administration
D. All of the above
See Answer

Choice "D" is correct as
Rural folk immigrating to urban cities in search for work etc. leads to urban congestion in the form of development of slums, inadequate amenities, problems of civic administration.
Choices "A", "B" and "C" are incorrect as
All the options are individually correct but we can not choose any single option.

Q18. Measures to eliminate poverty can be

A. Control of population growth rate
B. Rise in growth rate of economic development
C. Increase in rate of capital formation
D. All of the above
See Answer

Choice "D" is correct as
All the options are correct.
- Controlling population growth rate will result in the existing resources being sufficient to fulfill the basic necessities.
- Rise in the growth rate of economic development will result in an increase in the resources.
- Increase in the rate of capital formation will result in efficiency in the use of resources.
- Greater availability of resources will mean that basic necessities will be met and thus will help in removing poverty.
Choices "A", "B" and "C" are incorrect as
All the options are individually correct but we can not choose any single option.

Q19. According to the latest available data, the bed population ratio in India is per thousand populations.

A. 3.2
B. 9.5
C. 11.5
D. 20.3
See Answer

Choice "B" is correct as
According to the latest available data, the bed population ratio in India is 9.5 per thousand population.
Choices "A", "C" and "D" are incorrect as
Only option B is the correct answer.

Q20. Which of the following is an asset of the bank

A. Time deposit
B. Demand deposit
C. Share capital
D. Loans & Advances
See Answer

Choice "D" is correct as
Loans and advances include those amounts which is lent by commercial banks to private individuals and corporate bodies and earn interest thereon, hence, it is an long term asset for banks
Choice "A" is incorrect as
Time deposits are those deposits of customers which will mature after a specified period e.g: fixed deposits
Choice "B" is incorrect as
Demand deposits are those deposits of customers which are repayable whenever demanded by customers e.g: savings account.
Choice "C" is incorrect as
The capital which is raised by issuing shares in return of cash or other considerations from shareholders is called share capital - it is a liability which is to be repaid after a certain period of time (as per terms and conditions) or at the time of winding up of a bank.

Q21. Broad money refers to:

A. M1
B. M2
C. M3
D. M4
See Answer

Choice "C" is correct as
In 1979 the RBI classified money stock in India in four categories. One of them being, M3= M1 + Time deposits of the pubic with banks called broad money. (Where M1= Currency with the public i.e., coins and currency notes + Demand deposits of the public known as narrow money)
Choice "A" is incorrect as
M1= Currency with the public i.e., coins and currency notes + Demand deposits of the public known as narrow money.
Choice "B" is incorrect as
M2= M1 + Post office saving deposits.
Choice "D" is incorrect as
M4= M3 + Total post office deposits. (Excluding National Saving Certificates)

Q22. Inflation occurs when

A. Money supply increases
B. Increase in public expenditure
C. Both A and B
D. None of these
See Answer

Choice "C" is correct as
A general price rise can take place either as a result of rise in aggregate demand or a failure of aggregate supply or both. Increase in public expenditure, deficit financing, increase in money supply and rapid growth of population can be mentioned as demand factors and erratic agricultural growth, agriculture price policy, inadequate rise in industrial production and upward revision of administered prices etc. can be mentioned as supply factors which have led to inflationary price rise in India.
Choices "A", "B" and "D" are incorrect as
Option C is the only correct answer.

Q23. Which of the following statement is correct?

A. estate duty was abolished in 1995
B. income tax was abolished in 1998
C. Gift tax was abolished in 1998
D. VAT is a system of direct taxation adopted by all the states
See Answer

Choice "C" is correct as
A gift tax was first introduced in 1958 and was leviable on all donations to recognised charitable institutions, gifts to women dependents and gifts to wife. Gift tax was abolished in 1998.
Choice "A" is incorrect as
Estate duty was abolished in 1985.
Choice "B" is incorrect as
Income tax is still in vogue.
Choice "D" is incorrect as
VAT is a system of indirect taxation adopted by all the states.

Q24. An income tax system is said to be progressive

A. A. If the rate of increase of the tax liability of taxpaying unit is less than the rate of increase of its income
B. If the rate of increase of the tax liability of taxpaying unit is greater than the rate of increase of its income
C. If the rate of increase of the tax liability of taxpaying unit is equal to the rate of increase of its income
D. If the rate of increase of the tax bears a multiplicative relation with rate of increase in income of taxpaying unit
See Answer

Choice "B" is correct as
India has a progressive income tax. That means, as income increases, the rate of tax also increases. Thus, in India the tax system is progressive i.e., the rate of increase of the tax liability of taxpaying unit is greater than the rate of increase of its income.
Choice "A" is incorrect as
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases i.e., the rate of increase of the tax liability of taxpaying unit is less than the rate of increase of its income.
Choice "C" is incorrect as
In proportionate tax, the rate of increase of the tax liability of taxpaying unit is equal to the rate of increase of its income.
Choice "D" is incorrect as
When the rate of increase of the tax bears a multiplicative relation with rate of increase in income of taxpaying unit, tax system is said to be digressive. Taxes which are mildly progressive, hence not very steep, so that high income earners do not make a due sacrifice on the basis of equity, are called digressive. In digressive taxation, a tax may be progressive up to a certain limit; after that it may be charged at a flat rate.

Q25. Who was the chairman of the working group of planning commission which had suggested the shifting of base year of wholesale price index?

A. Dr. C Rangarajan
B. Prof. Abhijeet Sen
C. Prof. AR Khusro
D. D. Prof. Jankiraman
See Answer

Choice "A" is correct as
Dr. C Rangarajan was the chairman of the working group of planning commission which had suggested the shifting of base year of wholesale price index.
Choices "B", "C" and "D" are incorrect as
Option A is the only correct answer.

Q26. In order to pursue the objective of globalization, the measure has been taken:

A. Opening the economy with the foreign capital
B. Convertibility of rupee
C. Import liberalization
D. All of the above
See Answer

Choice "D" is correct as
To pursue the objective of globalisation, the measures like Convertibility of Rupee, Import liberalisation, Opening economy for foreign capital, Exchange rate adjustment, foreign companies have been allowed to use their trademarks and carry on business activity in India, repatriation of profits by foreign companies, foreign companies can borrow money or accept deposits in India, foreign companies can deal in immovable property in India, reputed Foreign Institutional Investors (FIIs) have been allowed to invest in Indian capital market have been taken.
Choices "A", "B" and "C" are incorrect as
All options are individually correct but we can not choose any single option.

Q27. Generally an economy is considered under developed if

A. The standard of living of people is low and productivity is also considerably low
B. Agriculture is the main occupation of the people and productivity in agriculture is quite low
C. The production techniques are backward
D. All of the above
See Answer

Choice "D" is correct as
Generally an economy is said to be underdeveloped, if it has Agriculture as the main occupation, Poverty is wide-spread, low rate of saving and capital formation/investment is very low, high population growth rate, low standard of living of people ,low productivity of labour, backward production techniques ,low Investment in research and development ,high unemployment and underemployment, low level of human well-being in terms of real income, health and education, high Income inequalities, low participation in foreign trade, social life of people is traditional and generally orthodox and they seldom make any changes in their socio-economic relations.
Choices "A", "B" and "C" are incorrect as
All options are individually correct but we can not choose any single option.

Q28. Assume that when price is Rs. 20, quantity demanded is 9 units, and when price is Rs. 19, quantity demanded is 10 units. Based on this information, what is the marginal revenue resulting from an increase in output from 9 units to 10 units.

A. Rs. 20
B. Rs. 19
C. Rs. 10
D. Rs. 1
See Answer

Choice "C" is correct as
MR = TR/ Q
Where MR is marginal revenue; TR is total revenue; Q is quantity of a commodity sold; stands for a small change.
Here, TR= (19 * 10) - (20 *9) = 190 - 180 = Rs. 10
Q = 10 - 9 = 1 unit
Therefore, MR = 10/1 = Rs.10
Choice "A" is incorrect as
It is the price per unit at which 9 units are sold.
Choice "B" is incorrect as
It is the price per unit at which 10 units are sold.
Choice "D" is incorrect as
RS.1 is obtained by subtracting the two prices. MR is not equal to AR for 9 units minus AR for 10 units.

Q29. Which one of the following is incorrect?

A. The LAC curve is also called the planning curve of a firm
B. Total revenue = price per unit * number of units sold
C. Opportunity cost is also called alternative cost
D. If total revenue is divided by the number of units sold we get marginal revenue
See Answer

Choice "D" is correct as
Hence total revenue is divided by the number of units sold we get average revenue. Marginal revenue is the revenue received by selling one extra unit of output.
Choice "A" is incorrect as
The LAC is often called the planning curve because a firm plans to produce any output in the long run by choosing a plant on the long run average cost curve corresponding to the given output. The LAC curve helps the firm in the choice of the size of the plant for producing a specific output at the least possible cost.
Choice "B" is incorrect as
Total revenue = Total number of units sold * price per unit.
Choice "C" is incorrect as
Opportunity cost is concerned with the cost of foregone opportunity. It involves a comparison between the policy that was chosen and the policy that was rejected. e.g. the opportunity cost of using capital is the interest that it can earn in the next best use with equal risk.

Q30. Direct tax is like;

A. Income tax
B. Wealth tax
C. Estate duty
D. All of the above
See Answer

Choice "D" is correct as
Income tax, estate duty, annual tax on wealth and gift tax are direct taxes.
Choices "A", "B" and "C" are incorrect as
The options are individually correct but we can not choose any single option.

Q31. Which is not a characteristic of India's economy at present?

A. Chronic unemployment and underemployment
B. Deep-rooted poverty
C. Lopsided distribution of labour force
D. Equality of distribution of wealth and income
See Answer

Choice "D" is correct as
The distribution of income and wealth in India is not equitable. In order to measure the inequality of income and wealth, generally Gini index is used. The Gini index measures the extent to which distribution of income/consumption among individuals or households within an economy deviates from a perfectly equal distribution. According to the Human Development Report - 2010, the Gini index for India for the period 2000-10 was 0.368.
Choice "A" is incorrect as
The incidence of unemployment in India is quite high In other words, out of 1000 persons in the labour force, as many as 66 are unemployed.
Choice "B" is incorrect as
In India, the incidence of poverty is very high. Every third poor person in the world is an Indian. ii) In India, the incidence of poverty is very high. Every third poor person in the world is an According to the Planning Commission, 29.8 per cent of the population was below poverty line in 2009-10. The corresponding ratio was 45.3 per cent in 1993-94 and 37.2 per cent in 2004-05.
Choice "C" is incorrect as
Not only there is high rate of open unemployment the rate of disguised unemployment is also very high. Disguised unemployment means apparently people are employed but their contribution to the production is very-very low. In other words, their productivity is nil or negative. Such type of unemployment is more common in the agricultural sector.

Q32. In the case of a straight line demand curve meeting the two axes, the price-elasticity of demand at the mid-point of the line would be:

A. 0
B. 1
C. 1.5
D. 2
See Answer

Choice "B" is correct as
Elasticity of demand is equal to 1 at the midpoint of the demand curve.
Choice "A" is incorrect as
Elasticity of demand is equal to zero at the point where demand curve meets the x-axis.
Choice "C" & "D" are incorrect as
Elasticity of demand is greater than one from the midpoint to the point where the demand curve meets the y-axis.

Q33.Demand for a commodity refers of

A. desire for the commodity
B. need for the commodity
C. quantity demanded for the commodity
D. quantity of the commodity demanded at a certain price during any particular period of time
See Answer

Choice "D" is correct as
Demand mean the various quantities of a given commodity or service which consumers would buy in one market in given period of time at various places or at various Income or various price of related goods.
Choice "A" is incorrect as
Desire of the commodity is one element of demand but not actually the demand
Choice "B" is incorrect as
Need for the commodity is one of the factors of demand and demand satisfies the need for the commodity
Choice "C" is incorrect as
Quantity demanded at given point of time refers to demand also price factor need to be considered for quantity demanded.

Q34. Which one is not an assumption of the theory of demand based on analysis of indifference curves?

A. Given scale of preference as between different combinations of two goods.
B. Diminishing marginal rate of substitution
C. Constant marginal utility of money
D. Consumers would be always prefers more of a particular good to less of it, other things remaining the same.
See Answer

Choice "C" is correct as
Assumptions Underlying Indifference Curve Approach are:
(i) The consumer is rational and possesses full information about all the relevant aspects of economic environment in which he lives.
(ii) The consumer is capable of ranking all conceivable combinations of goods according to the satisfaction they yield.
(iii) If the consumer prefers combination A to B, and B to C, then he must prefer combination A to C. In other words, he has a consistent consumption pattern.
(iv) If combination A has more commodities than combination B, then A must be preferred to B. Hence, Constant marginal utility of money is not an assumption under Indifference Curve Analysis.
Choice "A" is incorrect as
If the consumer prefers combination A to B, and B to C, then he must prefer combination A to C, he has a consistent consumption pattern i.e., Given scale of preference as between different combinations of two goods
Choice "B" is incorrect as
It has been observed that as more and more of one commodity (X) is substituted for another (Y), the consumer is willing to part with less and less of the commodity being substituted (i.e. Y). This is called diminishing marginal rate of substitution. This is one of the basic property of Indifference Curve Analysis.
Choice "D" is incorrect as
If combination A has more commodities than combination B, then A must be preferred to B. Consumers would be always prefer more of a particular good to less of it, other things remaining the same.

Q35. All but one of the following are not U-shaped

A. The AVC curve
B. The AFC curve
C. AC curve
D. The MC curve
See Answer

Choice "B" is correct as
AFC is a rectangular hyperbola and not a U shaped curve. AFC always decrease as the number of units produced increases but it can never touch the X-axis or we can say that it can never be zero.
Choices "A", "C" and "D" are incorrect as
AVC, AC, MC are U shaped curve which means they first decreases than after reaching a certain point it starts increasing.

Q36. EPCG stands for

A. Export Promotion Capital Goods
B. Expert Program for Credit Generation
C. Exchange Program for Consumer Goods
D. Export Promotion Consumer Goods
See Answer

Choice "A" is correct as
EPCG is a term used in India under exports and imports. EPCG means, Export Promotion Capital Goods. EPCG is one of the schemes provided by government of India to importers and exporters to promote exports. In simple and easy language, EPCG is a scheme related to machinery, machinery parts and similar goods. You (exporter) are a manufacturer exporter; you would like to import machineries in your factory from foreign country. Government supports exporters who earn foreign currency in various levels of financial assistance, exemption of import duty etc. In this case, the machineries you are importing are used for manufacturing of goods which are required to be exported where in you earn foreign exchange. However, you need to pay good amount at a time and you will get benefit of the imported machineries in coming years only. Apart from other financial assistance for exporters, you can get exemption of 100% import duty amount while importing such machineries. When obtaining EPCG license from government, you guarantee that you will export required amount or quantity of goods for next 5 years. EPCG is a good facility provided to exporters and importers by government on exemption of import duty amount.
Choices "B", "C" and "D" are incorrect as
Option A is the only correct answer.

Q37. When______________________, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productivity efficiency.

A. AC = AR
B. MC = AC
C. MC = MR
D. AR = MR
See Answer

Choice "B" is correct as
Plants are used at full capacity in the long run, so that there is no wastage of resources i.e. MC = AC.
Choice "A" is incorrect as
Firms earn only normal profits i.e. AC = AR.
Choice "C" is incorrect as
Firms maximize profits (i.e. MC=MR), but the level of profits will be just normal.
Choice "D" is incorrect as
MR = AR in case of perfectly competitive market where price elasticity of demand is equal to 1.

Q38. Under ......... the monopolist will fix a price which will take away the entire consumers' surplus.

A. Second degree of price discrimination
B. First degree of price discrimination
C. Third degree of price discrimination
D. None of the above
See Answer

Choice "B" is correct as
Under the first degree price discrimination the monopolist will fix a price which will take away the entire consumer's surplus.
Choice "A" is incorrect as
Under the second degree price discrimination, he will take away only a part of the consumers' surplus. Here price varies according to the quantity sold. Larger quantities are available at lower unit price.
Choice "C" is incorrect as
Under the third degree price discrimination, price varies by attributes such as location or by customer segment. Here the monopolist will divide the consumers into separate sub markets and charge different prices in different sub-markets.
Choice "D" is incorrect as
Option B is correct.

Q39. Which of the following necessarily declines continuously?

A. Marginal cost
B. Average fixed cost
C. Average variable cost
D. Total fixed cost
See Answer

Choice "B" is correct as
Average fixed cost is the fixed cost per unit of output. It is calculated by dividing total fixed cost by total number of output produced. As the denominator which is the total number of output sold is increasing and the numerator which is the fixed cost is fixed, the average fixed cost declines continuously.
Choice "A" is incorrect as
Marginal cost of a firm first decreases, reaches its minimum and than rises.
Choice "C" is incorrect as
Average variable cost first decreases with the increase in output than after a certain point it starts increasing with the increase in output.
Choice "D" is incorrect as
Total fixed cost does not change with the change in output.

Q40. A firm spends a total of Rs.1,800 to produce 100 units of a commodity per week. With increase in demand, the firm increases output to 200 units spending Rs.3,000 per week. Which of the following laws apply to it?

A. Increasing returns
B. Diminishing returns
C. Constant returns
D. None of these
See Answer

Choice "A" is correct as
AC for producing 100 units of output was 1800/100 = 18 Rs per unit and when output increased to 200 units than AC is 3000/200 = 15 Rs per unit. AC is decreasing with increase in output which means AP (Average product) must be increasing with increase in output. It shows that firm is at stage 1 i.e. increasing returns to scale.
Choice "B" is incorrect as
Diminishing returns mean AC increases with increase in output which is not the case here as average cost is decreasing from 18 Rs per unit to 15 Rs Per unit as output increases from 100 units to 200 units.
Choice "C" is incorrect as
Constant return is the stage where MC or MP for producing one extra unit remains same.
Choice "D" is incorrect as
Option A is correct so this option is invalid

Q41. Devaluation of currency stands for:-

A. Increasing the value of internal currency in terms of foreign currency
B. Reducing the value of internal currency in terms of foreign currency
C. Keeping the value of internal currency constant in terms of foreign currency
D. None of these
See Answer

Choice "B" is correct as
Devaluation means lowering the external value of the country's currency undertaken by the Government. This is different from depreciation of currency. Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies due to market forces. This happens typically in a floating exchange rate system.
Choice "A" is incorrect as
Increasing the value of internal currency in terms of foreign currency is called appreciation of currency.
Choice "C" is incorrect as
Keeping the value of internal currency constant in terms of foreign currency is stability in currency.
Choice "D" is incorrect as
Option B is correct hence this option is invalid.

Q42. In oligopoly, when the industry is dominated by one large firm which is considered as leader of the group. This is called:

A. full oligopoly
B. collusive oligopoly
C. partial oligopoly
D. syndicated oligopoly
See Answer

Choice "C" is correct as
Oligopoly is partial when the industry is dominated by one large firm which is considered or looked upon as the leader of the group. The dominating firm will be the price leader.
Choice "A" is incorrect as
In full oligopoly, the market will be conspicuous by the absence of price leadership.
Choice "B" is incorrect as
When few firms of the oligopolist market come to a common understanding or act in collusion with each other in fixing price and output, it is collusive oligopoly.
Choice "D" is incorrect as
Syndicated oligopoly refers to that situation where the firms sell their products through a centralized syndicate.

Q43. A curve which first moves upwards then downwards is naturally______

A. Marginal utility curve
B. Average utility curve
C. Total utility curve
D. Demand curve
See Answer

Choice "C" is correct as
A curve illustrating the relation between the total utility obtained from consuming a good and the quantity of the good consumed. The shape of the total utility curve, increasing at a decreasing rate, reflects the law of diminishing marginal utility. The reason for this is that slope of the total utility curve is marginal utility, meaning the total utility curve can be use to derive the marginal utility curve. The curve begins at the origin. If no units are consumed, then there is no utility. The total utility curve is shaped something like a hill. It increases initially, reaches a peak and then starts falling. i.e. It rises, flattens, then turns negative. The slope of this total utility curve is marginal utility.
Choice "A" is incorrect as
The marginal utility curve is negatively sloped. The marginal utility curve begins in the positive range of values, eventually intersects the horizontal axis, then enters the negative range. The quantity at which the marginal utility curve intersects the horizontal axis corresponds with the maximum value of total utility. The negative slope of this marginal utility curve is due to the law of diminishing marginal utility.
Choice "B" is incorrect as
Average utility is utility derived by per unit of consumption. These are derived by simply dividing the total utility by the total units consumed. Average Utility= Total Utility from consumption of products/Total Units of the products.
Choice "D" is incorrect as
The downward sloping demand curve is in accordance with the law of demand, describes an inverse price-demand relationship. Demand curve is negatively sloped.

Q44. External economics are witnessed in

A. A rising supply curve
B. A rising demand curve
C. A falling supply curve
D. A falling demand curve
See Answer

Choice "A" is correct as
External economies of scale occur when cost per unit of output depends on the size of the industry. Internal economies of scale occur when the cost per unit of output depends on the size of a firm. Under external economies of scale, when cost per unit decreases due to factors like(improved technology, easy availability of raw materials, provision of subsidies by government) will lead to high profit margin, thus increase the quantity to be supplied by the producers. This will lead to rise in supply curve towards right.
Choice "B" is incorrect as
A rising demand curve will be due to fall in the selling prices of the commodities.
Choice "C" is incorrect as
A falling supply curve will be due to external diseconomies of scale.
Choice "D" is incorrect as
A falling demand curve s due to rise in the prices of commodities, but this is not due to external economies of scale (related to production).

Q45. Fiscal policy means

A. Policy relating to money and banking in a country
B. Policy relating to public revenue and public expenditure
C. Policy relating to non-banking financial institution
D. None of these
See Answer

Choice "B" is correct as
Fiscal Policy means policy relating to public revenue and public expenditure and allied matters thereof.
Choice "A" is incorrect as
Monetary policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by its control over interest rates in order to maintain price stability and achieve high economic growth.
Choice "C" is incorrect as
Policy of Non-bank financial companies (NBFCs) includes guidelines and rules which has to be observed by NBFC in carrying out it financial activities and such NBFC's does not hold a banking license and are restricted from taking deposits from the public.
Choice "D" is incorrect as
Option B is correct.

Q46. Among these statements which one clearly explain the meaning of Subsidies

A. Payment by government for purchase of goods and service
B. Payment by business enterprise to factors of production
C. Payment by companies to shareholders
D. Payment by government to business enterprise without buying any goods and services
See Answer

Choice "D" is correct as
A subsidy is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy.
Choice "A" is incorrect as
Payment by government for purchase of goods and services is in the general course of economic activity.
Choice "B" is incorrect as
Payment by business enterprise to factors of production is in the form of wages, rent, interest, etc.
Choice "C" is incorrect as
Payment by companies to shareholders is in the form of dividend.

Q47. Price-taking firms i.e. firms that operate in the perfectly competitive market, are said to be small relative to the market. Which of the following best describes this smallness?

A. The individual firm must have fewer than 10 employees
B. The individual firm faces a downward-sloping demand curve
C. The individual firm has assets of less than Rs. 20 lakh
D. The individual firm is unable to affect market price through its output decisions
See Answer

Choice "D" is correct as
There are large number of buyers and sellers who compete among themselves and their number is so large that no buyer or seller is in a position to influence the demand or supply in the market. Also there is a perfect knowledge on the part of buyers and sellers, of the quantities of stock of goods in the market, market conditions and the prices at which transactions of purchase and sale are being entered into.
Choice "A" is incorrect as
By only having 10 number of employees doesn't make a firm small or big.-it depends on his relative market share.
Choice "B" is incorrect as
The demand curve facing an individual firm in a perfectly competitive market is a horizontal one (not downward sloping) at the level of market price set by the industry and firms have to choose that level of output which yields maximum profit.
Choice "C" is incorrect as
By having assets less than Rs. 20 lakhs doesn't make a firm small or big- it depends on his relative market share.

Q48. As development of country takes place, share of which sector rises?

A. Primary
B. secondary
C. tertiary sector
D. both B and C
See Answer

Choice "D" is correct as
When the development of a country takes place, the share of secondary and tertiary sector rises.
Choices "A", "B" and "C" are incorrect as
Primary sector includes agriculture and other activities related with agriculture such as animal husbandry, forestry, poultry farming etc. Secondary sector includes all types of manufacturing activities including construction etc. Tertiary sector this sector includes trade, transport, communication, banking and other such services. So as development take place we have more white collar jobs in the country.

Q49. Indifference curves never interest each other due to

A. Different levels of satisfaction
B. Same levels of satisfaction convex to origin
C. Convex to origin
D. Concave to origin
See Answer

Choice "A" is correct as
No two indifference curves will intersect each other although it is not necessary that they are parallel to each other. Indifference curves never interest each other due to different levels of satisfaction they provide. In case of intersection the relationship becomes logically absurd because it would show that higher and lower levels are equal which is not possible.
Choice "B" is incorrect as
The different points on the same Indifference Curve give the same level of satisfaction.
Choice "C" is incorrect as
It has been observed that as more and more of one commodity (X) is substituted for another (Y), the consumer is willing to part with less and less of the commodity being substituted (i.e. Y). This is called diminishing marginal rate of substitution. This happens mainly because the want for a particular good is satiable and as a person has more and more of a good, his intensity of want for that good goes on diminishing. This diminishing marginal rate of substitution gives convex shape to the indifference
Choice "D" is incorrect as
The diminishing marginal rate of substitution gives convex shape to the indifference, not concave.

Q50. .........shows various combinations of two products that give same amount of satisfaction

A. ISO cost curve
B. Indifference curve
C. Marginal utility curve
D. ISO quant
See Answer

Choice "B" is correct as
An indifference curve is a curve which represents all those combinations of two goods which give same satisfaction to the consumer. Since all the combinations on an indifference curve give equal satisfaction to the consumer, the consumer is indifferent among them. In other words, since all the combinations provide the same level of satisfaction the consumer prefers them equally and does not mind which combination he gets.
Choice "A" is incorrect as
The is cost line is combined with the iso-quant map to determine the optimal production point at any given level of output. Specifically, the point of tangency between any iso-quant and an iso-cost line gives the lowest-cost combination of inputs that can produce the level of output associated with that iso-quant.
Choice "C" is incorrect as
The marginal utility curve is an essential component of consumer demand theory and utility analysis. It graphically captures the relation between the utility generated from the consumption of an additional unit of a good and the quantity of the good consumed.
Choice "D" is incorrect as
An iso-quant (derived from quantity and the Greek word iso, meaning equal) 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.

Q53. The value of is

A. 0
B. 1
C. -1
D. none
See Answer

Q55. State whether the following sets are finite, infinite or empty: - (i) X = {1, 2, 3.....500} (ii) Y = {y: y = a2 ; a is an integer } (iii) A = {x:x is a positive integer multiple of 2} (iv) B = {x:x is an integer which is a perfect root of 26 A. Finite, infinite, infinite, empty
B. Infinite, infinite, finite, empty
C. Infinite, finite, infinite, empty
D. None
See Answer

Choice "A" is correct as
(i) is finite, (ii) is infinite, (iii) is infinite, (iv) is an empty set.
(i) X = {1, 2, 3,.....500} Finite
(ii) Y = {y: y = a2 ; a is an integer } Infinite
(iii) A = {x:x is a positive integer multiple of 2} Infinite
(iv) B = {x:x is an integer which is a perfect root of 26 Choice "B" is incorrect as
(i) is infinite.
Choice "C" is incorrect as
(i) is infinite.
Choice "D" is incorrect as
(A) is correct.

Q59. If there are 3 observations 15, 20, 25 then the sum of deviation of the observations from their AM is
A. 0
B. 5
C. -5
D. None of these
See Answer

Q64. Solving 9x+3y-4z=3 x+y-z=0 and 2x-5y-4z=-20 following roots are obtained


A. 2, 3, 4
B. 1, 3, 4
C. 1, 2, 3
D. None
See Answer

71. 10 examination papers are arranged in such a way that the best and worst papers never come together. The number of arrangements is


A. 9(8!)
B. 10!
C. 8(9!)
D. none of these
See Answer

Choice "C" is correct as
The 10 examination papers can be arranged in 10! ways.
In this arrangement, the best paper and the worst paper are coming together or are not coming together.
The arrangement is 2(9!) (As in the previous problem)
The arrangement in which these two papers never come together is 10! - 2(9!)
= 10 (9!) - 2(9!)
= 19 (10-2)
= 8x(9!).
Choice "A" is incorrect as
It is 9(8!).
Choice "B" is incorrect as
It is 10!.
Choice "D" is incorrect as
(C) is correct.

Q72. Out of 7 gents and 4 ladies a committee of 5 is to be formed. The number of committees such that each committee includes at least one lady is
A. 400
B. 440
C. 441
D. none of these

See Answer

Q73. 5 persons are sitting in a round table in such way that Tallest Person is always on the right-side of the shortest person; the number of such arrangements is
A. 6
B. 8
C. 24
D. none of these
See Answer

Choice "A" is correct as
There are 5 persons. Among these one is the tallest and one is the shortest.
Consider the group of such two persons as one unit and remaining persons as 1 unit.
Thus there are 4 units we have to arrange those 4 units in a circular arrangement such that the tallest person in always on the right side of the shortest person.
Such arrangement is (4-1)! = 3! =6.
Choice "B" is incorrect as
It is 8.
Choice "C" is incorrect as
It is 24.
Choice "D" is incorrect as
(A) is correct.

Q74. The ratio compounded of duplicate ratio of 4 : 5, triplicate ratio of 1 : 3, sub duplicate ratio of 81 : 256 and sub triplicate ratio of 125 : 512 is
A. 4:512
B. 3:32
C. 1:120
D. none of these
See Answer

Q75. The difference between C.I and S.I on a certain sum of money invested for 3 yeats at 6% p.a is Rs. 110.16. The sum is
A. Rs. 3000
B. Rs. 3700
C. Rs.12000
D. Rs. 10000
See Answer


Q76. The effective rate of interest corresponding to a nominal rate 3% p.a payable half yearly is
A. 3.2% p.a
B. 3.25% p.a
C. 3.0225% p.a
D. None of these
See Answer

Q78. In a single throw with two dice, the probability of getting a sum of six on the two dice is
A. 1/9
B. 5/36
C. 5/9
D. none


See Answer

Q79. Two dice are thrown at a time. The probability that 'the difference of numbers shown is 1' is
A. 11/18
B. 5/18
C. 7/18
D. none

See Answer

Choice "B" is correct as
Total no of events when 2 dice are thrown = =36 events when difference of numbers shown is 1 are
(1,2)
(2,1)(2,3)
(3,2),(3,4)
(4,3),(4,5)
(5,4),(5,6)
(6,5)
P(difference =1)
no of events favorable/total no of events
=10/36
=5/18
= (b)
Choice "A" is incorrect as
It is 11/8.
Choice "C" is incorrect as
It is 7/18.
Choice "D" is incorrect as
(B) is correct.

Q80. A card is drawn from a well- shuffled pack of playing cards. The probability that it is a king is
A. 1/13
B. 1/4
C. 4/13
D. none

See Answer

Choice "A" is correct as
There are 52 total cards & 4 kings, hence probability of drawing a king =4/52
=1/13
Choice "B" is incorrect as
Is not required probability.
Choice "C" is incorrect as
Is not required probability.
Choice "D" is incorrect as
(A) is correct.

Q81. A bag contains 8 red and 5 white balls. Two successive draws of 3 balls are made without replacement. The probability that the first draw will produce 3 white balls and the second 3 red balls is
A. 5/223
B. 6/257
C. 7/429
D. 3/548

See Answer



Q82. If the AM and GM for two numbers are 6.50 and 6 respectively then the two numbers are
A. 6 and 7
B. 9 and 4
C. 10 and 3
D. 8 and 5.

See Answer

Q83. When it comes to comparing two or more distributions we consider
A. Absolute measures of dispersion
B. Relative measures of dispersion
C. Both (A) and B)
D. Either (A) or (B).

See Answer

Choice "B" is correct as
Relative measures of dispersion do not depend on the unit of the variable under consideration, so we want to compare 2 or more distribution is possible using relative measures of dispersion hence (b) is true.
Choice "A" is incorrect as
Absolute measures of dispersion depend on the unit of the variable under consideration, so we have to compare 2 distributions which have different units that the absolute measures will not be directly comparable hence (a) is incorrect
Choice "C" is incorrect as
Only (b) is correct
Choice "D" is incorrect as
(It is known with certainty the (B) is correct, hence either (A) or (B) can't be correct answer, hence (D) is incorrect

Q86. If mean = 5, Standard deviation = 2.6 then the coefficient of variation is
A. 49
B. 51
C. 50
D. 52
See Answer

Q87. When r = 0 then cov (x,y) is equal to
A. + 1
B. (- 1)
C. 0
D. none

See Answer

Q88. Bivariate Data are the data collected for
A. Two variables
B. More than two variables
C. Two variables at the same point of time
D. Two variables at different points of time.

See Answer

Choice "C" is correct as
In Bivariate data analysis objective is to examine relationship between two variables.
Hence, observations on these two variables has to be at the same point of time
Choice "A" is incorrect as
Bivariate data analysis is not only about two variables. But they have to be at the same point of time. Different point of time includes effect of time
Choice "B" is incorrect as
Analysis of more than two variables at given point of time is called multivariate analysis.
Choice "D" is incorrect as
Studying two variables at different point of time includes effect of time also.

Q89. A theoretical probability distribution.
A. does not exist.
B. exists only in theory.
C. exists in real life.
D. both (B) and (C).

See Answer

Choice "B" is correct as
A theoretical probability distribution exists both in theory & in red life( in real life - distribution of right of a population follows normal distribution to a great content , distribution of results obtained while to --- a coin follows binomial distribution etc.) Hence both (B) & (C) are correct together i.e (D).
Choice "D" is incorrect as
Explained in (B)
Choice "A" is incorrect as
Theoretical probability distribution exists.
Choice "C" is incorrect as
Explained in (B)

Q90. If the overall percentage of success in an exam is 60, what is the probability that out of a group of 4 students, at least one has passed?
A. 0.6525.
B. 0.9744.
C. 0.8704.
D. 0.0256.

See Answer

Q91. Out of 128 families with 4 children each, how many are expected to have at least one boy and one girl?
A. 100.
B. 105.
C. 108.
D. 112.

See Answer


Q 92. In case the correlation coefficient between two variables is 1, the relationship between the two variables would be
A. y = a + bx
B. y = a + bx, b > 0
C. y = a + bx, b < 0
D. y = a + bx, both a and b being positive.

See Answer

Choice "B" is correct as
Since, correlation coefficient is +1.
Relationship between X & Y is perfect, positive, linear correlation.
Hence, increase in X leads to increase in y.
Hence, co-efficient of x,b > 0.
Choice "A" is incorrect as
If correlation coefficient between two variable is y, it indicated perfect positive linear correlation between two variables.
Hence, in regression line corresponding coefficient has to be the In (A) no regression can a & b so, (A) is false.
Choice "C" is incorrect as
b < 0, indicating negative correlation which is not possible hence, (C) is false.
Choice "D" is incorrect as
a, b >0 on both A & B Hence (D) is false.

Q93. Which of the following statements is correct?
A. Two distributions may have identical measures of central tendency and dispersion.
B. Two distributions may have the identical measures of central tendency but different measures of dispersion.
C. Two distributions may have the different measures of central tendency but identical measures of dispersion.
D. All the statements (A), (B) and (C).
See Answer

Choice "D" is correct as
Two distributions may have same means & same dispersion or they may have same mean & different dispersion or vice versa. Hence all the above statement (A),(B),(C) are correct i.e (D) is correct).
Choice "A" is incorrect as
The statement is true, but so are statement (B) & (C), hence (D) is correct which states that all the statements are correct.
Choice "B" is incorrect as
The statement is true, so is statement (B) & (C), hence (D) is correct which state that all the statement are correct.
Choice "C" is incorrect as
The statement is true, so are (B) & (C), hence (D) is correct which state that all the statements are correct.

Q94. The algebraic sum of deviations of 8,1,6 from the A.M viz.5 is
A. -1
B. 0
C. 1
D. None
See Answer

Q96. In Binomial Distribution 'n' mean
A. Number of trials of the experiment
B. The probability of getting success
C. Number of success
D. none

See Answer

Choice "A" is correct as
'n' denoted the no. of trials
Choice "B" is incorrect as
Probability of getting success is denotes by 'p'.
Choice "B" is incorrect as
No of success is the random variable denoted by x.
Choice "D" is incorrect as
(A) is correct.

Q97. A number is selected at random from the first 1000 natural numbers. What is the probability that the number so selected would be a multiple of 7 or 11?
A. 0.25
B. 0.32
C. 0.22
D. 0.33

See Answer


Q98. An important continuous probability distribution
A. Binomial distribution.
B. Poisson distribution.
C. Geometric distribution.
D. Normal distribution.

See Answer

Choice "D" is correct as
Normal is a continuous distribution.
Choice "A" is incorrect as
It is discrete.
Choice "B" is incorrect as
It is discrete.
Choice "C" is incorrect as
It is discrete.