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Created on March 13, 2026 By

CA Sonal Saboo

CMA Foundation

Foundation FBEM PN-4 Quiz 2

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.

1 / 30

Category: Fundamental of Business Economics and Management PN-4

1. Internal Economies and Diseconomies arise due to –

a. Overall industry-level changes

b. Changes at the Firm Level

c. Both (a) and (b)

d. Neither (a) nor (b)

2 / 30

Category: Fundamental of Business Economics and Management PN-4

2. The labour surplus is the difference between value of output minus

a. Values of materials used

b. Values of fixed land used

c. Values of capital used

d. none

3 / 30

Category: Fundamental of Business Economics and Management PN-4

3. Socialistic nature of an economy means

a. income and wealth are owned by the capitalists

b. income and wealth are owned by the labour class

c. income and wealth are owned by the state and public

d. All

4 / 30

Category: Fundamental of Business Economics and Management PN-4

4. Which of the following is/are an essential feature of the market :

a. Buyers

b. Sellers

c. Price

d. All the three

5 / 30

Category: Fundamental of Business Economics and Management PN-4

5. In the long run price is governed by

a. Cost of Production

b. Demand supply forces

c. Marginal utility

d. None

6 / 30

Category: Fundamental of Business Economics and Management PN-4

6. In the long run a firm in perfect competition earns :

a. Normal profit only

b. Abnormal profit

c. Average profit of past five years

d. 12.33% profits on capital employed

7 / 30

Category: Fundamental of Business Economics and Management PN-4

7. A firm faces the shut down situation when :

a. Price is less than average variable cost

b. Price is more than the average variable cost

c. Price is equal to fixed cost

d. Price is more than the average fixed cost

8 / 30

Category: Fundamental of Business Economics and Management PN-4

8. A firm that makes profit in excess of normal profit is earning

a. Economic profit

b. Costing profit

c. Normal profit

d. Super normal profit

9 / 30

Category: Fundamental of Business Economics and Management PN-4

9. The market state that satisfy all the essential features of a perfect competitive market except identity of product is known as :

a. Oligopoly

b. Duopoly

c. Monopoly

d. Monopolistic competition

10 / 30

Category: Fundamental of Business Economics and Management PN-4

10. In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes :

a. Profits and new firms join the market

b. Profit and bar entry to new firms

c. Makes losses and exit the market

d. Quick profit and disappears

11 / 30

Category: Fundamental of Business Economics and Management PN-4

11. Which of these is associated with a monopolistic competitive market –

a. Product differentiation

b. Homogeneous Product

c. Normal in short run

d. Single buyer

12 / 30

Category: Fundamental of Business Economics and Management PN-4

12. In a competitive market is the price maker :

a. Firm

b. Industry

c. Consumer

d. Trade association

13 / 30

Category: Fundamental of Business Economics and Management PN-4

13. A Monopoly demand curve is :

a. Same as its average revenue curve

b. Same as its supply curve

c. Same as marginal cost curve

d. None of these

14 / 30

Category: Fundamental of Business Economics and Management PN-4

14. When the firm is in the long period equilibrium it gets only :

a. normal profit

b. no loss no profit

c. super normal profit

d. loss

15 / 30

Category: Fundamental of Business Economics and Management PN-4

15. Equilibrium of the firm under perfect Market means ,when :

a. MR curve cuts the MC curve from below

b. MC curve cuts the MR curve from from below

c. MC Curve and MR curve are Parallel to each other

d. AR curve is Equal to MC curve

16 / 30

Category: Fundamental of Business Economics and Management PN-4

16. Penetration pricing means :

a. price will reduced after gaining market share

b. reduce price when loosing market share

c. price will be raised later after gaining market share

d. None of these

17 / 30

Category: Fundamental of Business Economics and Management PN-4

17. One of the example of Oligopoly market is :

a. Cosmetic industry

b. Cartel

c. automobile industry

d. Technology

18 / 30

Category: Fundamental of Business Economics and Management PN-4

18. The forces of supply and demand determine the :

a. the quantity of the goods

b. the price of the goods

c. different prices from different customers

d. demand of customers

19 / 30

Category: Fundamental of Business Economics and Management PN-4

19. Excess profits earned by each firm during short time would attract:

a. new firms to enter into the market

b. market share of each firm will be less

c. there is no barrier on the entry into the market

d. All of the above

20 / 30

Category: Fundamental of Business Economics and Management PN-4

20. In monopoly market there is :

a. A singlefirm ,single product

b. A single firm, many substitute identical product

c. A single product , many firm

d. None of the above

21 / 30

Category: Fundamental of Business Economics and Management PN-4

21. the concept of monopolistic competition market was introduced by :

a. Alfred Marshall

b. Prof. Chamberlin

c. Karl Marx

d. John Rbinson

22 / 30

Category: Fundamental of Business Economics and Management PN-4

22. Which of the following is near money?

a. Bill of exchange

b. Saving bonds

c. Gilt edged securities

d. All the three

23 / 30

Category: Fundamental of Business Economics and Management PN-4

23. Optional money is a:

a. Legal tender money

b. Non-legal tender money

c. Limited legal tender money

d. Full bodied money

24 / 30

Category: Fundamental of Business Economics and Management PN-4

24. Which of the following function does money serve when used to measure the prices of different goods and services?

a. Store of value

b. Medium of exchange

c. Standard of value

d. Display of power

25 / 30

Category: Fundamental of Business Economics and Management PN-4

25. Which of these affects the demand for money?

a. Real income

b. Price level

c. Rate of interest

d. Both (a) and (c)

26 / 30

Category: Fundamental of Business Economics and Management PN-4

26. Which of these would lead to fall in demand for money?

a. Inflation

b. Increase in real income

c. Increase in real rate of interest

d. Increase in wealth

27 / 30

Category: Fundamental of Business Economics and Management PN-4

27. Supply of money refers to :

a. Total money held by the public

b. Total money held by RBI

c. Total money with all the commercial banks and RBI

d. Total money in Government account

28 / 30

Category: Fundamental of Business Economics and Management PN-4

28. Which is the apex bank for agricultural credit in India?

a. RBI

b. SIDBI

c. NABARD

d. IDBI

29 / 30

Category: Fundamental of Business Economics and Management PN-4

29. RBI check inflation by

a. Increasing bank rate

b. Increasing CRR

c. Both

d. None

30 / 30

Category: Fundamental of Business Economics and Management PN-4

30. If the country is passing through recession, the RBI would

a. Buy bonds

b. Reduce CRR

c. Ease out bank rate

d. All or any of the above three

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Foundation PN-4 FBEM Quiz 2

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