July 2016 - Paper2

1:  

The following is the demand function :
Q = 100 - SP
What will be the point price elasticity of demand at price Rs 10 ?

A.

2.00

B.

1.00

C.

0.85

D.

0.50

 
 

Option: C

Explanation :

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2:  
The short-run cost function of a firm is as under :
TC = 200 + 5Q + 2Q2
What will be the level of output at which AC and MC will be equal ?
A.

20

B.

15

C.

10

D.

5

 
 

Option: B

Explanation :

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3:  
Match the items of List – I with the items of List – II and select the code of correct matching :
management

 

A.

iii  iv  i  ii

B.

i ii iv iii

C.

ii  iii  i  iv

D.

iv  iii  ii  i

 
 

Option: D

Explanation :

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4:  

Assertion (A) : The perceived risk of operating a domestic firm in international environment is much higher.

Reason (R) : The international environment is more volatile and the domestic firm generally does not have full information about the environment.

A.

Both (A) and (R) are correct.

B.

Both (A) and (R) are incorrect.

C.

(A) is correct while (R) is incorrect.

D.

(A) is incorrect while (R) is correct.

 
 

Option: B

Explanation :

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5:  

Statement – I : The accept-reject approach is adopted generally when a firm has a large amount of funds to invest in several projects at the same time.

Statement – II : Both the NPV and the IRR methods of investment appraisal are based on discounted cash flow approach.

A.

Both the statements are correct.

B.

Both the statements are incorrect.

C.

Statement – I is correct while Statement – II is incorrect.

D.

Statement – I is incorrect while Statement – II is correct.

 
 

Option: C

Explanation :

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