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

Total Questions: 100

11. If the scale parameter (r) is greater than one (r >1) the CES production function exhibits:

Correct Answer: (d) Increasing returns to scale
Solution:

If the scale parameter (r) is greater than one (r > 1) the CES production function exhibits in crossing returns to scale.
• The two factor (Capital, labour) CES [constant elasticity of substitution] production function introduced by solow, and later made popular by Arrow, Chenery, minhas, and solow is:-
• V = degree of homogeneity of the production function. Where V = 1 (Constant return to scale), V < 1 (Decreasing return to scale), V > 1 (Increasing return to scale).

12. When demand is slack and market is competitive, firms follow which of the following pricing methods?

Correct Answer: (c) Marginal cost pricing
Solution:

When demand is slack and market is competitive firms follow Marginal cost pricing method.
key points:-
• The primary aim of the company adopting this pricing method is to meet its marginal cost & over heads.
• The marginal costing method is suitable for entering the industries which are dominated by giant players, posing a fierce competition for the organisation to sustain in the business.

13. What is the value of levered firm “L” if it has the same EBIT as an unlevered firm “U”, (with value of ₹ lac), has a debt of ₹ 200 lac, tax rate is 35% under MM approach?

Correct Answer: (c) ₹ 770 lac

14. ______ is a percentage discount rate used in capital investment appraisals which brings the cost of a project and its future cash inflows into equality.

Correct Answer: (b) Internal rate of return
Solution:

Internal rate of Return is percentage discount rate used in capital in capital investment appraisals which brings the cost of a project and its future cash inflows into equality.
Internal Rate of Return-
• It is the rate at which net present value of the investment is zero.
  PV of cash inflows = PV of cash outflows

15. The theory which explains the effect of devaluation on balance of trade is known as:

Correct Answer: (b) Mundell- Tobin Hypothesis
Solution:

 J-curve theory explains the effect of devaluation on balance of trade.
• In economics it refers to the trend of a country's trade balance following a devaluation or depreciation under a certain set of assumptions.
• A J-curve demonstration is a representation of any value that initially falls before recovering and ultimately rising.
• The J-curve shows how a currency depreciation causes a severe worsening of a trade imbalance followed by a substantial improvement.

16. The annual demand for an item is 3,200 units. The unit cost is ₹ 6 and inventory carrying charges 25% p.a. If the cost of one procurement is ₹ 150, determine number of orders per year.

Correct Answer: (b) 4
Solution:

17. If each value in a given set of data is divided by 4, how will it affect Karl Pearson’s coefficient of Skewness?

Correct Answer: (c) It will not affect the co-efficient of Skewness
Solution:

If each value in a given set of data is divided by 4. It will not affect the co-efficient of skewness.
Karl Pearson’s coefficient of SkewnessThere will be 00 change.

18. A coin and pair of dice are tossed together, the total number of possible outcome for an experiment is:

Correct Answer: (b) 72
Solution:

A coin and pair of dice are tossed together, the total number of possible outcome for an experiment is 72.
• When a coin tossed, total cases occurred = 2
• When two dices were rolled, total case occurred = 6² = 36
• When both cases happen together simultaneously, then total cases will be –
  6² × 2 = 36 × 2 = 72

19. Which of the values of a series is decreased by K. Which of the following does not hold in the context?

Correct Answer: (b) The co-efficient of quartile deviation remain unchanged
Solution:

The co-efficient of quartile deviation remain unchanged.

20. For Binomial distribution with n = 30, q = 0.7, the mean and variance will be equal to:

Correct Answer: (c) 9 and 6.3
Solution: