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Created on March 13, 2026 By

CA Sonal Saboo

CMA Foundation

Foundation FBEM PN-4 Quiz 1

This quiz is based on the CMA Fundamentals of Business Economics and Management paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA FBEM concepts.

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Category: Fundamental of Business Economics and Management PN-4

1. Capitalistic economy means where the wealth and income of the country are owned by the

a. state

b. land owners

c. state and public

d. bourgeoises

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Category: Fundamental of Business Economics and Management PN-4

2. A Rational Producer will operate in –

a. Stage I

b. Stage II

c. Stage III

d. All of the above

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Category: Fundamental of Business Economics and Management PN-4

3. What is the maximum point of TP?

a. When AP become zero

b. When MP become zero

c. At the intersecting point of AP& MP

d. None of these

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Category: Fundamental of Business Economics and Management PN-4

4. All factor of production become variable in –

a. Medium – run

b. Short- run

c. Long –run

d. none of the above

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Category: Fundamental of Business Economics and Management PN-4

5. Price elasticity demand of product will be more elastic if it .

a. has no substitutes

b. has number of substitutes

c. is an item of necessity

d. is life saving product

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Category: Fundamental of Business Economics and Management PN-4

6. The demand for salt is inelastic, because .

a. of low price

b. absence of it makes food tasteless

c. no substitutes

d. All the three

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Category: Fundamental of Business Economics and Management PN-4

7. Which of the following is not a factor in market supply of a product?

a. cost of production

b. number of buyers

c. market price of the product

d. price of related products

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Category: Fundamental of Business Economics and Management PN-4

8. Modes of production was propounded by

a. Adam Smith

b. Karl Marx

c. David Ricardo

d. Alfred Marshall

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Category: Fundamental of Business Economics and Management PN-4

9. Identify the correct statement.

a. Average product is at its maximum when Marginal Product is equal to Average Product.

b. Law of Increasing Returns to Scale relates to the effect of changes in factor proportions

c. Economies of Scale arise only because of invisibilities of factor proportions.

d. Internal Economies of scale can accrue only to the exporting sector.

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Category: Fundamental of Business Economics and Management PN-4

10. At the point of Inflexion, TP will generally-

a. Show increases trend

b. Show decreasing or increasing trends

c. Equal to Zero

d. be negative

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Category: Fundamental of Business Economics and Management PN-4

11. is the functional relationship between physical inputs (i.e. factors of production), and physical outputs (i.e. quantity of good / service produced)

a. Input- Output Function

b. Demand – Supply Function

c. Production Function

d. Cost Function

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Category: Fundamental of Business Economics and Management PN-4

12. Luxury goods have degree of elasticity.

a. High

b. low

c. Moderate

d. none

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Category: Fundamental of Business Economics and Management PN-4

13. Point elasticity was propounded by:

a. Adam smith

b. Marshall

c. Robbins

d. Keynes

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Category: Fundamental of Business Economics and Management PN-4

14. Nature of PPF curve is

a. convex to the origin

b. concave to the origin

c. both

d. none

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Category: Fundamental of Business Economics and Management PN-4

15. In economics goods includes material things which

a. A can be transferred

b. can be visible

c. both A & B

d. None

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Category: Fundamental of Business Economics and Management PN-4

16. Normative Economic theory deals with

a. What to produce

b. How to produce

c. Whom to produce

d. How the problem should be solved

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Category: Fundamental of Business Economics and Management PN-4

17. Who was the father of Economics ?

a. Marshall

b. Adam smith

c. Robbins

d. Keynes

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Category: Fundamental of Business Economics and Management PN-4

18. In the primitive age the factors used in production were mainly

a. Capital

b. Land

c. Labour

d. Both land and labour

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Category: Fundamental of Business Economics and Management PN-4

19. If PPF is linear it implies

a. constant opportunity cost

b. diminishing apart cost

c. Increasing opportunity cost

d. none

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Category: Fundamental of Business Economics and Management PN-4

20. Micro Economics theory deals with.

a. Economy as a whole

b. Individual units

c. Economic growth

d. all the above

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Category: Fundamental of Business Economics and Management PN-4

21. Human wants are

a. limited

b. unlimited

c. undefined

d. none

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Category: Fundamental of Business Economics and Management PN-4

22. Any point beyond PPF is

a. attainable

b. unattainable

c. both

d. none

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Category: Fundamental of Business Economics and Management PN-4

23. If an economy is working at the point left to PPF curve that shows…

a. Full employment

b. unemployment

c. excess production

d. none

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Category: Fundamental of Business Economics and Management PN-4

24. If the price of burger rises from ₹12 per piece to ₹ 20 per piece as a result of which the daily sales decrease from 300 to 200 pieces per day. The price elasticity of demand can be estimated as:

a. 0.5

b. 0.8

c. 0.25

d. 2.1

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Category: Fundamental of Business Economics and Management PN-4

25. An increase in price will result in an increase in total revenue if

a. percentage change in quantity demanded in greater than the percentage change in price

b. percentage change in quantity demanded is less than the percentage change in price

c. percentage change in quantity demanded is equal to the percentage change in price

d. none

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Category: Fundamental of Business Economics and Management PN-4

26. Which of these will have highly inelastic supply?

a. perishable goods

b. consumer durables goods

c. Items of elite class consumption

d. All the three

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Category: Fundamental of Business Economics and Management PN-4

27. The supply function of a product x is as Sx = 5px+3. Where px stand for price. The quantity supplied corresponding to price of ` 2 will be ……… .

a. 18

b. 13

c. 15

d. 23

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Category: Fundamental of Business Economics and Management PN-4

28. Variable factor means those factors of production

a. Which can be only changed in the long run?

b. Which can be changed in the short run?

c. Which can be never be changed

d. Both (a) & (b) correct

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Category: Fundamental of Business Economics and Management PN-4

29. If the Marginal product of labour is below the Average product of Labour, it must be true that

a. The Marginal product of Labour is negative

b. The Marginal Product of Labour is Zero

c. The Marginal Product of Labour is falling

d. The Average product of Labour is negative 26

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Category: Fundamental of Business Economics and Management PN-4

30. Why does the Law of Increasing Returns operate?

a. Full use of Fixed Indivisible Factors.

b. Efficiency of Variable Factors

c. Need to reach the right combination

d. All of the above

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Foundation PN-4 FBEM Quiz 1

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