NTA UGC NET/JRF Exam, Dec. 2020/June 2021 (Commerce) Shift-I

Total Questions: 100

81. Given below are two statements:

Statement I : patents are defined as monopoly rights which are granted by the government, full disclosure of invention for a limited period of time, that is for 20 years
Statement II : The purpose of granting patents is to encourage inventions by promoting their protection and utilization so as to contribute to the development of industries
In light of the above statements, choose the most appropriate answer from the options given below :

Correct Answer: (a) Both Statements I and Statement II are correct
Solution:

 Both statement I and statement II are correct.

Key points :
■ As per Indian patent Act, 1970. A patent is granted on a product process or on invention for a limited period of 20 years. For disclosing full details of the invention.
■ The main purpose of patent system is to encourage innovation and eventually results in technological development, which results in development of Industries.

82. Which one of the following is considered a necessary precondition by Richard Roll for markets to become efficient?

Correct Answer: (d) Trades who make a living by 'beating the market' through trading
Solution:

Traders who make a living by 'beating the market' through trading.

■ Richard roll on market efficiency
The concept of an efficient market is a special application of the "no free lunch" principle. In efficient financial market, costless trading will not generates 'excess' returns. Thus, if costless trading policies are ineffective, there must exist some traders who make living by 'beating the market.' They cover their costs (including the opportunity cost of their time) by trading. The existence of such traders is actually a necessary precondition for markets to become efficient.

83. Traders who make a living by 'beating the market' through trading. ■ Richard roll on market efficiency The concept of an efficient market is a special application of the "no free lunch" principle. In efficient financial market, costless trading will not generates 'excess' returns. Thus, if costless trading policies are ineffective, there must exist some traders who make living by 'beating the market.' They cover their costs (including the opportunity cost of their time) by trading. The existence of such traders is actually a necessary precondition for markets to become efficient.

Correct Answer: (b) IMF
Solution:

Bretton woods resolution led to the formation of IMF

Key points :
■ International monetaryfund (IMF) and the International Reconstruction & Development BANK (IBRD) were established in July1944 to basis of Bretton woods conference (U.S.)

84. The due date of the first installment of advance tax paid by an assessee other than the company is:

Correct Answer: (c) 15th June
Solution:The due date of the first installment of advance tax paid by an assessee other than the company is 15 June.
Key points :
For all other categories of taxpayers earning income from any source (Eg) salary, Rent, Business/profession, capital gains, interest etc.

85. A U-shaped long-run average cost curve is based on the assumptions that

A. Economies of scale prevails at small levels of output
B. Diseconomies of scale prevails at larger levels of output
C. Benefits of the division of labour and specialization accrue more at the lower scale of production
D. Managerial inefficiencies are prone to a higher scale of operations
Choose the correct answer from the options given below :

Correct Answer: (b) A, B, C and D
Solution:

The assumptions that U-shaped long-run age cost curve is based :
■ Economies of scale prevails at small levels of output.
■ Diseconomies of scale prevails at larger levels of output.
■ Benefits of the division of labour and specialization accrue more at the lower scale of production.
■ Managerial inefficiencies are prone to a higher scale of operations.

Note : Long run Average Cost (LAC) per unit cost incurred by a firm i.e long run total costs divided by the level of output. LAC curve is derived as an envelopant of all SAC curves. U-shaped curve, due to the operation of law of Return to scale. Also known as envelop and planning curve.

86. The values in one of the series in a bivariate data set are multiplied by a constant K, which of the following would change as a result of this:

A. Karl Pearson's coefficient of correlation
B. Standard deviation
C. Covariance between the variables
D. Rank correlation coefficient
Choose the correct answer from the options given below :

Correct Answer: (d) B and C only
Solution:

The value is one of the series in a bivariate data set are multiplied by a constant K.
The following would change as a result of this :
■ Standard deviation
SD is independent on the change of origin but dependent on the change of scale
i.e. If y = a + bx, SD (y) = [b]×SD(x).
■ Covariance between the variables :
The change in scale of the variables effects the value of covariance.

87. A contract is said to be discharged by rescission:

A. When terms of a contract are altered
B. When a party makes novation of a contract
C. When an aggrieved party exercises his option to avoid the contract
D. When a party to a contract waives his rights under the contract
E. Where none of the parties has performed its part for a long time and no other party has objected against it
Choose the correct answer from the options given below :

Correct Answer: (d) C and E only
Solution:

A contract is said to be discharged by rescission.
■ When an aggrieved party exercises his option to avoid the contract.
■ Where none of the parties has performed its part for a long time and no other party has objected against it.

Note : Rescission (Sec. 62) Indian contract Act 1872
Rescission of a contract takes place when the parties to a contract may decide that they will forget the contract and will not bring a new contract into existence to replace it. A promise not to demand performance from each other becomes the mutual consideration of discharge of contract.

88. Arrange in the sequence, steps in the procedure for calling a statutory meeting of the company

A. Contents of the statutory report
B. A list of members must be produced at the commencement
C. Twenty-one days notice
D. Certification of the statutory report by not less than two directors, one of whom must be the managing director
E. A certified copy of the statutory report must be delivered to the Registrar
Choose the correct answer from the options given below :

Correct Answer: (c) C, A, D, E, B
Solution:

The procedure for calling a statutory meeting of the company are :
■ Twenty-one days notice
■ Contents of the statutory report
■ Certification of the statutory report by not less than two directors, one of whom must be the managing director.
■ A certified copy of the statutory report must be delivered to the registrar.
■ A list of members must be produced of the commencement.

Note : The provisions regarding, statutory meeting was mentioned in companies Act 1956, but not mentioned in companies Act 2013.

89. Which one of the following is NOT true for the functional organization?

Correct Answer: (b) It is based on the principle of unity of command
Solution:

It is based on the principle of unity of command.
■ Functional organization is a type of organizational structure that uses the principle of specialization based on function or role.
■ The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations.
■ Three authorities exist- line, staff and function.
■ Each functional area is put under the charge of functional specialist and he has got the authority to give all decisions regarding the functions whenever the function is performed.
■ principle of unity of command does not apply to such organization as it is present in line organization.

90. Incentives schemes where earnings differ at different levels of output are:

A. Gantt Task System
B. Halsey Plan
C. Rowan Plan
D. Bedaux Plan
E. Emerson's Efficiency Plan
Choose the correct answer from the options given below :

Correct Answer: (a) A and E only
Solution:

Incentives schemes where earnings differ at different levels of output are :
■ Gantt Task System :
Under this system, standard time is fixed for the completion of a task based on a careful time and motion study, the worker's actual performance is compared against the standard time to determine his efficiency and make the payments accordingly.
■ Emersons Efficiency plan :
Under this plan, the wages are paid at the standard rate and the amount of bonus paid to the worker's depends on the individual efficiency of the workers.
■ Earnings differing at different levels of output. Some other schemes fall under this category are Taylor's differential piece-rate system, the Merrick Differential piece-rate system.