Chapter-wise marks distribution I-5 Chapter-wise comparison with study material I-7 PART I : BUSINESS ECONOMICS CHAPTER 1 1.3 CHAPTER 2 2.1 CHAPTER 3 3.1 CHAPTER 4 4.1 CHAPTER 5 5.1 PART II : BUSINESS & COMMERCIAL KNOWLEDGE CHAPTER 6 6.3 CHAPTER 7 7.1 Contents I-9
CHAPTER 8 8.1 CHAPTER 9 9.1 CHAPTER 10 10.1 CHAPTER 11 11.1 SOLVED PAPER: DEC. 2021 (MEMORY BASED) P.1 SOLVED PAPER: JUNE 2022 (MEMORY BASED) P.14 I-10
3.1 Meaning of Production 1. What is Production is Economics: a b c d [CA CPT Dec. 2008] 2. Which of the following is considered as production in economics? a b c d [CA CPT May 2019] 3. Which of the following is considered production in Economics? a b c d 4. Which of the following statements is true? a b c d 5. Production may be defined as an act of: a b c d [Jan. 2021] 6. In Economics, entire process of _________ is nothing but creation of utilities in the form of goods and services. a b c d [CA CPT June 2017] 7. Which activity is the base of all production activities a b THEORY OF PRODUCTION AND COST 3 CHAPTER
3.2 c d [Nov. 2020] 8. Production is defined as: a b c d [CA CPT June 2015] 9. According to _______________, Production is the organized activity of transforming resources into finished products in the form of goods and services, and the objective of production is to satisfy the demand of such transformed “resources”. a b c d a b 10. ______________ to exchange in the market is an essential component of production. a b c d 11. Production does not include work done ______________. a b c d Factors of Production 12. Factors of production refer to : a b c a b d a b 13. a b c d 14. Which of the following factors of production is a free gift of nature and refers to Natural resources? a b c d 15. Which of the following is not a characteristic of land? a b c d 16. Which of the following is not a characteristics of Land? a b c d [CA CPT Dec. 2012]
3.3 17. Which among the following is not a characteristic of land? a b c d [CA CPT Dec. 2016] 18. Which of the following statement about factors of production is not true? a b c d [CA CPT Nov. 2018] 19. No two pieces of land and alike. They differ in fertility and situation. Therefore, Land is _______________. a b c d 20. Which of the following is correct about Land? a b c d 21. Supply of land is : a b c d [Nov. 2019] 22. The total supply of Land is _____________ from the point of view of the economy. However, it is relatively ____________ from the point of view of a firm. a b c d 23. Labour force wants more ___________. a b c d [CA CPT Dec. 2009] 24. Which of the following is not a characteristic of labour? a b c d [CA CPT Dec. 2016] 25. The concept of “innovative entrepreneurship” was given by a b c d [Nov. 2020] 26. The labour power or efficiency of labour depends upon the ________________. a b c d
27.3.4 Labour is highly perishable in the sense that ____________________. a b c d 28. Without the active participation of labour, land and capital may not produce anything. It means labour is ________________ factor. a b c d 29. Which one of the following is not a necessary function of an entrepreneur? a b c d [July 2021] 30. Human capital refers to: a b c d [CA CPT June 2016] 31. _____________ Capital performs its function is production in a single use and is not available for future use. a b c d 32. Which of the following is not a passive factor of production? a b c d [July 2021] 33. Which one of the following may be regarded as a part of social capital? a b c d a b 34. The three stages of capital forma tion are : a b c d 35. __________________ means a sus tained increase in the stock of real capital in a Country. a b c d 36. Which one of the following state ments is not correct? a b
3.5 c d [CA CPT June 2016] 37. Functions of the entrepreneur are: a b c d [CA CPT June 2009] 38. An Entrepreneur undertakes which one of the following functions? a b c d [CA CPT June 2014] 39. Innovation theory of entrepreneur ship is propounded by: a b c d [CA CPT Dec. 2013] 40. The most important function of an entrepreneur is to ____________. a b c d 41. Who has given the concept of Innovative Entrepreneurship? a b c d [CA CPT June 2008] 42. The basic minimum objective of all kinds of enterprises is to survive or to stay alive. It may be regarded as ______________ objective of the enterprise. a b c d 43. ______________ objective implies the profit maximizing behaviour of the firm. a b c d 44. ____________ mobilizes factors of production, combines them in the right proportion, initiates the process of production and bears the risks involved in it. a b c d 45. Which one of the following function is performed by entrepreneur? a b c d
46.3.6 According to _____________, the true function of an entrepreneur is to introduce innovations. a b c d Production Function 47. Which of the following is the best definition of “production function”? a b c d 48. A production function is defined as the relationship between __________. a b c d [CA CPT Dec. 2012] 49. The production function is a rela tionship between a given combination of inputs and: a b c d 50. What is a production function? a b c d 51. Production function is: a b c d [CA CPT Dec. 2013] 52. The production function: a b c d
3.7 53. __________ shows the overall output generated at a given level of input: a b c d [CA CPT Nov. 2006] 54. Which function shows relationship between input and output? a b c d [CA CPT Dec. 2010] 55. A functional relationship between inputs and output is called........... a b c d [Nov. 2020] 56. Which of the following statements is true? ab c d 57. Which one of the following is the assumption underlying any production function? a b c d 58. The short run, as economists use the phrase, is characterized by: ab c d 59. To economists, the main difference between the short run and the long run is that: a b c d
60.3.8 In describing a given production technology, the short run is best described as lasting: a b c d 61. In the short run, the firm’s product curves show that a b c d 62. Long period production function is related to: a b c d [CA CPT June 2015] 63. Long-run does not have: a b c d [CA CPT Dec. 2008] 64. A fixed input is defined as a b c d 65. In the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience a b c d Cobb-Douglas Production Function 66. Paul Douglas and Cobb stud ied the production function of the ____________ manufacturing indus tries. a b c d 67. In its original form, the CobbDouglas production function applies:
3.9 a b c d 68. In Cobb-Douglas production function, two inputs are: a b c d [CA CPT Dec. 2013] 69. The famous Cobb-Douglas pro duction function is based on studies of __________ industries in the United States of America. a b c d [CA CPT June 2017] 70. If Cobb-Douglas function is given by Q = KLaCb, then there will be ____________ when (a+b) __________ a b c d [CA CPT May 2018] 71. The conclusion drawn from CobbDouglas production function is that la bour contributed about __________ and capital about _________ of the increase in the manufacturing production. a 3 4 , 1 4 rd st b 2 1 2, 1 c 1 4 , 3 4 th th d [CA CPT Dec. 2015] 72. According to Cobb-Douglas pro duction function, will get __________ returns to scale? a b c d [CA CPT Nov. 2018] 73. According to Cobb-Douglas pro duction function, labour contribution in increasing manufacturing production is a b c d [Jan. 2021] Total, Average and Marginal Product 74. What will be the total product when two labourers are hired according to the table given below? No. labourersof ProductTotal Marginalproduct a b
3.10 c d [CA CPT Dec. 2010] 75. Marginal product is the slope of: a b c d [Nov. 2019] 76. Consider the following table: Labour OutputTotal MarginalProduct What is the total output, when 2 labour are employed? a b c d [CA CPT June 2008] 77. Which of the following is correct : a b c d [Nov. 2019] 78. _______________ is the total output resulting from the efforts of all the factors of production combined together at any time. a b c d 79. Average product is defined as a b c d 80. Suppose the first four units of a variable input generate corresponding total outputs of 200, 350, 450, 500. The marginal product of the third unit of input is: a b c d 81. Use the following diagram to an swer the question given below it The marginal physical product of the third unit of labour is _____, the MP of the _____ labour is Negative a b c d
3.38 b c d [CA CPT Nov. 2018] 305. Large scale production is associ ated with a b c d [Nov. 2019] 306. Which of the following statements is true? a b c d 307. Supply curve remaining un changed, an increase in demand will lead to. a b c d [CA CPT June 2010] 308. Marginal Cost changes due to changes in _____________ a b c d [Nov. 2019] 309. Price of a commodity is best expressed as a b c d [CA CPT Nov. 2018] 310. A firm will close down in the short period if its average revenue is less than its: a b c d [CA CPT June 2012] 311. Which of the following statements is incorrect? a b c d 312. Average Revenue Curve is also known as ____________. a b c d [CA CPT June 2010]
3.39 Answer 1. a 2. d 3. a 4. a 5. a 6. b 7. a 8. b 9. d 10. a 11. d 12. a 13. d 14. a 15. d 16. b 17. a 18. d 19. b 20. c 21. c 22. b 23. b 24. d 25. d 26. d 27. a 28. b 29. d 30. c 31. a 32. d 33. d 34. a 35. a 36. c 37. d 38. d 39. b 40. a 41. c 42. a 43. b 44. d 45. d 46. a 47. c 48. a 49. b 50. a 51. a 52. d 53. b 54. c 55. c 56. d 57. d 58. a 59. c 60. d 61. d 62. b 63. c 64. b 65. c 66. a 67. c 68. b 69. a 70. b 71. a 72. a 73. b 74. b 75. a 76. c 77. c 78. a 79. c 80. b 81. d 82. c 83. b 84. d 85. a 86. b 87. a 87A a 88. a 89. c 90. c 91. c 92. a 93. b 94. a 95. a 96. b 97. c 98. a 99. d 100. a 101. b 102. a 103. c 104. d 105. b 106. a 107. a 108. a 109. a 110. d 111. b 112. b 113. c 114. c 115. c 116. d 117. b 118. c 119. a 120. b 121. c 122. b 123. a 124. d 125. c 126. b 127. b 128. d 129. c 130. c 131. c 132. a 133. d 134. b 135. d 136. c 137. b 138. b 139. a 140. b 141. c 142. c 143. b 144. c 145. b 146. a 147. b 148. c 149. a 150. b 151. b 152. d 153. d 154. d 155. a 156. b 157. c 158. d 159. b 160. d 161. d 162. a 163. a 164. b 165. d 166. a 167. b 168. a 169. d 170. b 171. c 172. b 173. c 174. b 175. d 176. a 177. c 178. a 179. a 180. d 181. a 182. d 183. a 184. b 185. b 186. b 187. b 188. c 189. c 190. b 191. d 192. c 193. b 194. a 195. d 196. d 197. b 198. a 199. d 200. d 201. b 202. b 203. a 204. b 205. a 206. b 207. a 208. d 209. d 210. c 211. c 212. d 213. b 214. b 215. c 216. d 217. d 218. d 219. a 220. b 221. d 222. c 223. c 224. b 225. c 226. c 227. d 228. a 229. c 230. d 231. d 232. d 233. a 234. c 235. a 236. b 237. d
3.40238. a 239. c 240. b 241. a 242. b 243. a 244. a 245. a 246. d 247. a 248. d 249. c 250. a 251. c 252. a 253. c 254. c 255. d 256. a 257. d 258. d 259. a 260. a 261. d 262. d 263. b 264. c 265. a 266. c 267. c 268. a 269. c 270. d 271. c 272. c 273. a 274. d 275. b 276. b 277. d 278. b 279. a 280. c 281. b 282. d 283. b 284. b 285. c 286. b 287. b 288. c 289. c 290. d 291. d 292. a 293. a 294. a 295. c 296. b 297. d 298. d 299. b 300. c 301. c 302. d 303. b 304. a 305. a 306. b 307. b 308. a 309. a 310. b 311. d 312. b Hints of selected questions Ans.1. : (a) 2.Ans. : (d) Ans.5. : (a) Ans.12. : (a) Ans.66. : (a) 70.Ans. : (b)
3.41 71.Ans. : (a) Ans.72. : (a) 73.Ans. : (b) 74. 580 Units Ans. : (b) 76.Ans. : (c) 80 Variable Input Total Product Marginal Product MP3 Ans. : (b)
82.3.42 quantity of variable factor is depicted on the X axis and the Total Product (TP), Average Marginal Product (MP) are shown on the Y-axis. As the gure shows, the TP curve goes on point and after that it starts declining. AP and MP curves rst rise and then decline; MP declining earlier than the AP curve. these Total, Average and Marginal Products of the variable factor consequent on the amount is generally divided into three stages (laws) which are explained below. Fig. 1: Law of Variable Proportions Law of Variable Proportions Ans. : (c) Ans.84. : (d) 85. When average product falls, marginal product is less than the average product.Ans.:( a) 86. No. of workers Total Output Marginal Output 013 Ans. : (b)
3.43 MP87A.n = TPn - TPn-1 Ans. : (a) Ans.92. : (a) Ans.94. : (a) 96.MPn = TPn - TP n·1 Ans. : (b) Ans.112. : (b) 130.Ans. : (c) Ans.131. : (c) Ans.132. : (a) 147. Total cost = Explicit Cost + Implicit Cost + Normal Profit ` Ans. : (b) Ans.192. : (c) 193.Ans. : (b)
200.3.44 ` ` ` ` ` ` = ` 350 Ans. : (d) 201. ` ` ` ` ` ` Ans. : (b) 203. ChangeinTotalCost ChangeinTotalQuantity ` X80 42 X80 2 ` Ans. : (a) 204. ` ` ` ` .200 10 Rs ` ` ` ` 280 Ans. : (b)
212.
214. ` ` ` 1,170 9 ` Ans.
Fig. 9 : Short run Total Cost Curves
Short run Total Cost Curves
the total xed cost curve (TFC) is a horizontal straight line parallel to X-axis as TFC the whole range of output. This curve starts from a point on the Y-axis meaning thereby that be incurred even if the output is zero. On the other hand, the total variable cost curve rises indicating that as output increases, total variable cost increases. The total variable cost curve starts because variable costs are zero when the output is zero. It should be noted that the total initially increases at a decreasing rate and then at an increasing rate with increases in output. change in the TVC occurs due to the operation of the law of increasing and diminishing variable inputs. Due to the operation of diminishing returns, as output increases, larger variable inputs are required to produce the same quantity of output. Consequently, variable steeper at higher levels of output. The total cost curve has been obtained by adding vertically cost curve and the total variable cost curve. The slopes of TC and TVC are the same at every and at each point the two curves have vertical distance equal to total xed cost. Its position amount of xed costs and its slope re ects variable costs. average costs cost (AFC) : AFC is obtained by dividing the total xed cost by the number of units of output AFCTFC Q where Q is the number of units produced. Thus, average xed cost is the xed cost output. For example, if a rm is producing with a total xed cost of ` 2,000/-. When output is 100 average xed cost will be ` 20. And now, if the output increases to 200 units, average xed cost will total xed cost is a constant amount, average xed cost will steadily fall as output increases. draw an average xed cost curve, it will slope downwards throughout its length but will not as AFC cannot be zero. (Fig. 10) variable cost (AVC) : Average variable cost is found out by dividing the total variable cost by units of output produced, i.e. AVCTVC Q where Q is the number of units produced. Thus, cost is the variable cost per unit of output. Average variable cost normally falls as output zero to normal capacity output due to occurrence of increasing returns to variable factors.
Ans. : c) Variable Cost Per unit ChangeinTotalCost ChangeinUnits 3520 10 ` : ) :
(
a business is de ned as the actual cost that must be incurred for producing a given quantity short run total cost is composed of two major elements namely, total xed cost and total Symbolically TC = TFC + TVC. We may represent total cost, total variable cost and xed cost diagrammatically.above,
` ` Ans.
(d
(b) 216. ` ` `
3.45 210. BUSINESS ECONOMICS
Rs. : 345 | AUTHOR : Ritu Gupta PUBLISHER : TAXMANN DATE OF PUBLICATION : July 2022 EDITION : 6th Edition ISBN NO : 9789356223066 NO. OF PAGES : 374 BINDING TYPE : PAPERBACK Business Economics & Business and Commercial Knowledge (Economics | BEBCK) | CRACKER ORDER NOW Description USD : 35 This book is prepared exclusively for the Foundation Level of Chartered Accountancy Examination requirement. It covers the past exam questions & detailed answers strictly as per the new syllabus of TheICAI.Present Publication is the 6th Edition & updated till 30th April 2022 for CA-Foundation | New Syllabus | Dec.2022/June 2023 exams. This book is authored by Dr. Ritu Gupta, with the following noteworthy features: · As per the latest syllabus of ICAI Coverage of this book includes: All Past Exam Questions CA Foundation Solved Paper –December 2021 | Memory Based CA Foundation Solved Paper – June 2022 | Memory Based Questions from ICAI Study Material · [Chapters are Divided into Sub-Topics] for easy learning · [Most Amended & Updated] Questions of Business and Commercial Knowledge have been updated as per the current scenario [Marks Distribution] Chapter-wise marks distribution (new syllabus) from May 2018 onwards [Comparison with ICAI Study-Material] has been provided chapter-wise
