NTA UGC NET - Commerce: UNIT 03: BUSINESS ECONOMICS (PART 01)

NTA UGC NET- Commerce: Unit 03 - Business Economics (Part 01) 

UNIT 03

Business Economics

PART 01

 

 MCQ 01: Which of the following statement(s) is/are correct

 

a.Business economic is a special branch of economics applied in business decision making.
b.Business economic is the application of economic theory and methodology to business
c.Business Economics, also called Managerial Economics
d.All of the above

 

Answer: all of the above 

 

Business economic is the integration of economic theory (demand theory, cost theory, price theory etc.)with business practices for the purpose of facilitating decision making and forward planning by management. 

 

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MCQ 02: Decisions which are taken without conscious thoughts

 

a.Spontaneous decision
b.Rational decision
c.Programmed decision
d.Individual decision 

 

Answer: spontaneous decision

 

Spontaneous decision:

Decision making is the selection based on some criteria from two or more possible alternatives 

 

Rational decision: 

decisions taken after systematic study and logical analysis 

 

Programmed decision: 

decisions taken in accordance with the excising rules and procedure. They are concerned with routine and repetitive problems. 

 

Individual decision: 

decisions taken by a single individual.

 

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MCQ 03: Which of the following statement is correct about law of demand

 

A. There is a positive relationship between the price of the goods and quantity demanded
 

B. Price is the only factor that affect the demand of a commodity
 

C. More of the commodity will be demanded at higher price
 

D. There is an inverse relationship between the price of the commodity and quantity demanded

 

Answer : There is an inverse relationship between the price of the commodity and quantity demanded 

 

Law of Demand:

Law of demand states that here is a negative (or inverse )relationship between the price of the commodity and quantity demanded, holding other factors constant (cetris paribus).

 

Some of the factors are:

income of consumer, price of related goods, taste and preference of buyer etc. 

 

Exemptions: 

• Inferior or giffen goods
• Prestige good
• Consumer’s misconception
• Change in fashion

 
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 MCQ 04: Change in demand as a result of change in factors other than price

a.Shift in demand
b.Movement in demand
c.Demand schedule
d.None of the above

Answer: shift in demand

When the change in demand as a result of change in factors other than price, it is called shift in demand

 A shift in demand can be Rightward shift or Leftward shit

Movement in demand (expansion or extension and contraction of demand)

• Change in quantity as a result of change in price (other factors held constant)
• Expansion -When there is an increase in quantity demand as a result of fall in price.

• Contraction - When there is a fall in quantity demand as a result of rise in price. 

• Meaning and scope of business economics
• Objectives of business firms
• Demand analysis: Law of demand; Elasticity of demand and its measurement; Relationship between AR and MR
• Consumer behavior: Utility analysis; Indifference curve analysis
• Law of Variable Proportions: Law of Returns to Scale
• Theory of cost: Short-run and long-run cost curves
• Price determination under different market forms: Perfect competition; Monopolistic competition; Oligopoly- Price leadership model; Monopoly; Price discrimination
• Pricing strategies: Price skimming; Price penetration; Peak load pricing

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