,Exam Paper for Managerial Economics in BBA (With
Answers)
PAPER # 1
**Managerial Economics Exam Paper**
**Duration: 2 Hours**
**Total Marks: 100**
**Instructions:**
1. This exam paper consists of two sections: Section A (Multiple
Choice Questions) and Section B (Short Answer Questions).
2. Section A contains 20 multiple-choice questions (MCQs). Each
MCQ is worth 2 marks.
3. Section B contains 5 short answer questions. Answer all questions
in Section B. Each question in Section B is worth 16 marks.
4. Write your answers clearly and legibly.
5. Calculators are allowed for calculations.
**Section A: Multiple Choice Questions (40 marks)**
Choose the correct answer for each of the following questions:
1. Which of the following is not a key assumption of perfect
competition?
a. Homogeneous products
b. Many buyers and sellers
2
, c. Perfect information
d. High barriers to entry
**Answer: d. High barriers to entry**
2. Elasticity measures the:
a. Percentage change in quantity demanded for a one percent
change in price
b. Percentage change in price for a one percent change in quantity
demanded
c. Total change in quantity demanded for any change in price
d. Total change in price for any change in quantity demanded
**Answer: a. Percentage change in quantity demanded for a one
percent change in price**
3. When marginal cost is equal to marginal revenue, a profit-
maximizing firm should produce:
a. More output
b. Less output
c. The current level of output
d. Zero output
**Answer: c. The current level of output**
4. In the short run, a firm should shut down if:
a. Total revenue is less than total cost
b. Total revenue is greater than total cost
3
, c. Variable cost is greater than total revenue
d. Fixed cost is greater than total revenue
**Answer: a. Total revenue is less than total cost**
5. Which of the following is a determinant of demand elasticity?
a. The availability of close substitutes
b. The number of firms in the industry
c. The level of fixed costs
d. The minimum wage rate
**Answer: a. The availability of close substitutes**
6. What is the main objective of cost-benefit analysis?
a. Maximizing profits
b. Minimizing costs
c. Evaluating the desirability of a project or policy
d. Achieving economic efficiency
**Answer: c. Evaluating the desirability of a project or policy**
7. Which market structure is characterized by a single seller and no
close substitutes?
a. Perfect competition
b. Monopolistic competition
c. Monopoly
d. Oligopoly
4
Answers)
PAPER # 1
**Managerial Economics Exam Paper**
**Duration: 2 Hours**
**Total Marks: 100**
**Instructions:**
1. This exam paper consists of two sections: Section A (Multiple
Choice Questions) and Section B (Short Answer Questions).
2. Section A contains 20 multiple-choice questions (MCQs). Each
MCQ is worth 2 marks.
3. Section B contains 5 short answer questions. Answer all questions
in Section B. Each question in Section B is worth 16 marks.
4. Write your answers clearly and legibly.
5. Calculators are allowed for calculations.
**Section A: Multiple Choice Questions (40 marks)**
Choose the correct answer for each of the following questions:
1. Which of the following is not a key assumption of perfect
competition?
a. Homogeneous products
b. Many buyers and sellers
2
, c. Perfect information
d. High barriers to entry
**Answer: d. High barriers to entry**
2. Elasticity measures the:
a. Percentage change in quantity demanded for a one percent
change in price
b. Percentage change in price for a one percent change in quantity
demanded
c. Total change in quantity demanded for any change in price
d. Total change in price for any change in quantity demanded
**Answer: a. Percentage change in quantity demanded for a one
percent change in price**
3. When marginal cost is equal to marginal revenue, a profit-
maximizing firm should produce:
a. More output
b. Less output
c. The current level of output
d. Zero output
**Answer: c. The current level of output**
4. In the short run, a firm should shut down if:
a. Total revenue is less than total cost
b. Total revenue is greater than total cost
3
, c. Variable cost is greater than total revenue
d. Fixed cost is greater than total revenue
**Answer: a. Total revenue is less than total cost**
5. Which of the following is a determinant of demand elasticity?
a. The availability of close substitutes
b. The number of firms in the industry
c. The level of fixed costs
d. The minimum wage rate
**Answer: a. The availability of close substitutes**
6. What is the main objective of cost-benefit analysis?
a. Maximizing profits
b. Minimizing costs
c. Evaluating the desirability of a project or policy
d. Achieving economic efficiency
**Answer: c. Evaluating the desirability of a project or policy**
7. Which market structure is characterized by a single seller and no
close substitutes?
a. Perfect competition
b. Monopolistic competition
c. Monopoly
d. Oligopoly
4
