Name of the Organisation : University Of Library - Cochin University of Science and Technology
Name of the Exam : Common Admission Test (CAT)
Document Type : Sample Question Paper
Year: 2016
Subject: Economics

Website : www.library.cusat.ac.in/cat/2016/
Download Model/Sample Question Papers: http://www.indianjobtalks.com/upload...-Economics.pdf

CAT Economics Sample Question Paper :
1. Utility is always related to
A. Usefulness
B. Want Satisfying Power
C. Profit
D. Maximum returns

2. Inductive logic proceeds from
A. General to General
B. Particular to General
C. General to Particular
D. Particular to Particular

3. The concept of consumer surplus was coined by
A. Ricardo
B. Marshall
C. Fisher
D. Pigou

4. Opportunity costs are also known as
A. Overheat costs
B. Money cost
C. Alternative costs
D. Social costs

5. A consumer attains his/her equilibrium at the point where
A. Total utility = Price
B. Marginal utility < Price
C. Marginal utility > Price
D. Marginal utility = Price

6. The revealed preference theory of consumer’s behavior is based on
A. Consistency
B. Strong ordering
C. Positive income elasticity of demand
D. All the above

7. The cost incurred by the firm in hiring labour is called as
A. Explicit cost
B. Implicit cost
C. Marginal cost
D. Total cost

8. What is full cost?
A. Average direct costs
B. Average overhead costs
C. Normal margin for profit
D. All above taken together

9. Under oligopoly, the price of the product is fixed at the point
A. On Kink in the demand curve
B. Where MC = MR
C. Where AC = MC
D. Where AC = MR

10. Cobb-Douglas production function assumes that the elasticity of substitution is
A. One
B. Two
C. Three
D. Four

11. Economic rent is earned by a factor when its
A. Supply is inelastic
B. Supply is more than its demand
C. Supply is perfectly elastic
D. Demand is less than its supply

12. Wages Fund Theory was formulated by
A. J.S. Mill
B. Walker
C. Marshall
D. Physiocrats

13. Quasi-rent is
A. Equal to the firm’s total profits
B. Greater than firm’s total profits
C. Smaller than firm’s total profits
D. Not related to firm’s profits

14. IS curve represents
A. Goods market equilibrium
B. Money market equilibrium
C. Bond market equilibrium
D. Labour market equilibrium

15. When interest elasticity of demand for money is zero, the LM curve is
A. Vertical parallel to Y – axis
B. Horizontal parallel to X – axis
C. Positive sloping straight line
D. Negative sloping straight line

16. In case of proportional relation between consumption and income
A. APC > MPC
B. APC = MPC
C. APC < MPC
D. APC = MPS

17. The Philips curve shows that
A. High unemployment rates are associated with low inflation rate
B. High unemployment rates are associated with high inflation rate
C. High unemployment rates are associated with a large increase in the nominal wage
D. High inflation rates are associated with a small increase in the nominal wage

18. The chief exponent of the purely monetary explanation of business cycle (or Trade cycle) is
A. F.A. Hayek
B. R.G. Hawtrey
C. Gustav Cassel
D. J.A. Hobson

19. Who is author of the book called, “The Purchasing Power of Money”?
A. J.S. Mill
B. F.W. Taussig
C. Joan Robinson
D. Irving Fisher

20. The velocity of money measures
A. The use of each unit of money in purchasing final output
B. The average use of money in purchasing final output
C. The average use of money by customers in purchasing consumer goods
D. The average use of money by the business sector

21. “Keep up with the Joneses” is
A. Snob effect
B. Bandwagon effect
C. Affluence effect
D. Tiffin effect

22. Production refers to
A. Transformation of inputs or resources into output of goods
B. Transformation of inputs or resources into output of services
C. Transformation of inputs or resources into output of goods and services
D. Transformation of inputs or resources into output of goods or services

23. Incremental cost refers to
A. Change in total cost from implementing a particular management decision
B. Change in total cost from producing more than one unit
C. Change in total cost due to an unexpected rise in price of inputs
D. None of these

24. In break even analysis, the difference between price and average variable cost is called
A. Total profit
B. Net profit
C. Contribution
D. Income

25. Among the following, which is the best example for second degree price discrimination?
A. Charging a low price in the domestic market and high price in the international market
B. Charging a high price in the domestic market and low price in the international market
C. Pricing strategy in public utilities
D. Charging different prices from different consumers