Economics for Engineers MCQ Set-1

1. What is true about the relationship between AC and MC ?

(A) AC cuts MC from below
(B) MC cuts AC from below
(C) MC and AC do not cut each other
(D) AC equals MC when AC is at its maximum

2. If Current Ratio is 2.2 and Current Liability is Rs. 80,000 then the amount of current asset will be

(A) Rs. 1,76,000
(B) Rs. 1,34,000
(C) Rs. 1,60,000
(D) Rs. 1,72,000

3. In replacement analysis old machines are known as :

(A) Defender
(B) Challenger
(C) Both (a) and (b)
(D) None of these

4. At Break-even point

(A) Total revenue = Total Cost
(B) Total revenue = Total Fixed Cost
(C) Total revenue = Total Variable Cost
(D) All of the above

5. Demand-pull inflation may be caused by

(A) An increase in costs
(B) A reduction in government spending
(C) A reduction in interest rates
(D) An outward shift in aggregate supply

6. Goodwill is a

(A) Fixed asset
(B) Current asset
(C) Fictitious asset
(D) Wasting asset

7. A large angle of incidence indicates

(A) A low rate of profit
(B) A high rate of profit
(C) No profit, no loss
(D) None of the above

8. A card is drawn from a deck of 52 cards. Find the probability that it is either a red king or a black queen.

(A) 2/13
(B) 1/13
(C) 5/13
(D) 8/13

9. IRR stands for the rate of return for which

(A) NPV = 0
(B) NPV = 1
(C) NPV = -1
(D) NPV is maximum

10. The present value of ₹ 1 to be received after 3 years compounded annually at 10%

(A) 0.909
(B) 0.826
(C) 0.751
(D) None of the above

11. A uniform series of payment occuring at equal interval of time is called _______

(A) Annuity
(B) Amortization
(C) Depreciation
(D) Bond

12. The following value(s) of the Power-Sizing Exponent(E) indicates Economies of Scale

(A) 0 < E < 1
(B) E > 1
(C) E = 0
(D) E = 1

13. Costs reflected in accounting system only are called

(A) Cash cost
(B) Overhead cost
(C) Book cost
(D) Direct cost

14. The opportunity cost of a good is

(A) The time last in finding it
(B) The quantity of other goods sacrificed to the another unit of that good
(C) The expenditure on the good
(D) The loss of interest in using saving

15. Which one is the right Accounting Equation ?

(A) Assets – Liabilities = Capital
(B) Assets + Liabilities = Capital
(C) Assets + Capital = Liabilities
(D) None of these

16. Inflation makes

(A) Future rupees less valuable than present rupees
(B) Future rupees more valuable than present rupees
(C) Future rupees equal to present rupees
(D) None of these

17. If A and B are two independent events then P( A and B )

(A) P(A) X P(B)
(B) P(A) + P(B)
(C) P(A) / P(B)
(D) P(A) – P(B)

18. To compute the construction cost per square foot of a building

(A) Per unit model will be used
(B) Segmenting model will be used
(C) Learning curve estimation process will be used
(D) None of these

19. Which one is fixed cost?

(A) Depreciation of fixed assets
(B) Excise duty
(C) Cost of advertising
(D) Sales tax

20. Which one of the following is helpful for measuring inflation ?

(A) Learing curve
(B) Segmentation model
(C) Consumer price index
(D) MARR(Minimum attractive rate of return)