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1. Which of the following is not a part of effective demand? a) Desire b) Ability to purchase c) Willingness to use the resource for that purpose d) Supply of a commodity Samvit Academy Tip: Anything can be called demand only when there is desire, ability and willingness to purchase. Supply is not a variant of effective demand. 2. Which of the following pairs of goods is an Example of substitutes? a) Tea and sugar b) Tea and coffee c) Pen and ink d) shirt & trouser Samvit Academy Tip: All other options are complements. Only tea and coffee can be substituted for each other. 3. In case of an inferior good, the income elasticity of demand is a) Positive b) Negative c) Zero d) Infinite Samvit Academy Tip: income and demand for a particular commodity is inversely related only in case of inferior goods. Hence income elasticity for an inferior good will be negative. 4. If a good is luxury, its income elasticity of demand is: a) Positive and less than 1. b) Negative but greater than -1. c) Positive and greater than 1 d) Zero Samvit Academy Tip: in the case of a luxury, income elasticity of demand will be positive and greater than one. This is because as the income of a person increases, the proportion of income spent on such commodities also increases. 5. If there is 50% rise in price and there is no change in Quantity demanded, then the elasticity of demand is? a) Zero b) Infinity c) Equal to one d) Greater than one Samvit Academy Tip: when the price changes and quantity demanded does not change at all, the demand is said to be perfectly inelastic. Hence elasticity will be zero.



6. Which of the following is not a determinant of Supply? a) Price of good concerned b) Price of related goods. c) Technology improvements d) Customs & Traditions Samvit Academy Tip: customs and traditions do not affect supply. They affect demand. 7. When the price of a commodity increases from Rs. 200 to Rs. 250 and consequently the quantity supplied increases from 1000 units to 1100 units. What is the co-efficient of elasticity of supply a) 4.0 b) 0.4 c) 5.0 d) 0.5 Samvit Academy Tip: p1 - 200 ₹ , p2 - 250 ₹, q1 - 1000 units, q2 - 1100 units , Per - (∆q/q) * (p/∆p) Hence,( 100/1000) *(200/50) = 0.4 8. Indifference curve is convex to the origin due to a) Increasing Marginal rate of substitution b) Diminishing Marginal Rate of substitution c) Constant Marginal Rate of substitution. d) None of the above. Samvit Academy Tip: indifference curves are downward sloping and convex to the origin. This is because the MRS which is also the slope of the curve shows a decreasing trend. 9. Which of the following is not an assumption of LDMU? a) Different units of commodities are standardised. b) Continuous consumption c) Different units of commodities must be similar d) The assumption is that consumer is not normal and rational Samvit Academy Tip: The consumer should be rational for the law of diminishing marginal utility to hold good. 10. C.W. Cobb and Douglas of the U.S.A. studied the production function of the American _____ industries: a) Manufacturing b) Construction c) Agriculture d) None of these Samvit Academy Tip: Cobb and Douglas studied the production function of the American manufacturing industries. In economics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or



more inputs, particularly physical capital and labour, and the amount of output that can be produced by those inputs. 11. In economics _____ refers to creating utility for goods & services? a) Consumption b) Production c) Distribution d) None of the above Samvit Academy Tip: production is addition of value or creation of utility. Utility can be created by changing form, making a commodity available at the right place or right time and also in the form of personal skills being imparted through services. 12. The cost of one thing in terms of the alternative given up is known as: a) Production cost b) Physical cost c) Real cost d) Opportunity cost Samvit Academy Tip: opportunity cost is the cost associated with the opportunity forgone or the alternative not chosen. 13. Now a days, in the long run the modern firms faces _____ cost curve when technology changes. a) U-Shaped b) Boat Shaped c) L Shaped d) J Shaped Samvit Academy Tip: long run average cost curve according to modern economists is L shaped and not U shaped. This is because any plant curve chosen by the firm because of advance technology will help the firm produce at minimum average cost. 14. ______ Cost remain fixed over certain range of output, but suddenly jump to a new higher level when output goes beyond a given limit. a) Semi – Variable Cost b) Variable Cost c) Fixed Cost d) Stair – Step Variable Cost Samvit Academy Tip: also known as stepped fixed costs. These costs remain the same for a certain level of output, beyond which they change and then again remain constant until a certain output level. It resembles a stair case. 15. The average Cost of Producing 9 units of Commodity is Rs.200 and the fixed cost is RS. 630. What amount of average total cost is made up of variable cost? a) 130 b) 120 c) 300 d) 200 Samvit Academy Tip: AC for 9 units is ₹200 TFC - ₹630 AFC - ₹630/9 = ₹70 AVC = AC - AFC AVC = 200 - 70 = ₹130



16. Find out AVC of 3 units:

Unit 0 1 2 3

TC 140 180 280 380

a) 80 b) 200 c) 300 d) 240 Samvit Academy Tip: TC @3 units = ₹380 TFC - ₹140 TVC = TC - TFC TVC = 380 - 140 = ₹240 AVC @3 units = ₹240 /3 = ₹80 17. Which of the following markets are classified on the basis of nature of transactions ? a) Local and Regional markets b) Retail & Wholesale c) Regulated and Un-regulated d) Spot market and Future market. Samvit Academy Tip: spot market and future markets host different types of transactions. Other markets are different types of markets based on factors other than nature of transactions like geography, government control etc. 18. When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease. a) Fall b) Constant c) Rise d) None Samvit Academy Tip: when the supply curve shifts to the right , demand curve remaining the same, equilibrium price falls while quantity demanded and supplied increases. 19. Which of the following statement is incorrect? a) Under monopoly there is no difference between a firm and an industry. b) A monopolist may restrict the output and raises the price. c) Commodities offered for sale under a perfect competition will be heterogeneous. d) Product differentiation is peculiar to monopolistic competition. Samvit Academy Tip: in a perfect competition, homogeneous or identical goods are sold. 20. Under which of the following forms of market structure does a firm have not control over the price of its product? a) Monopoly b) Monopolistic competition c) Oligopoly d) Perfect competition



Samvit Academy Tip: under perfect competition the firm has no control over the price prevailing in the market. The firm is a price taker. 21. Under perfect competition a firm is described as a) A Price maker & not price taker, b) Price taker & not price maker c) Neither price maker nor price taker d) None. Samvit Academy Tip: a firm in a perfectly competitive market is a price taker and not a price maker. It takes the price determined in the market through the free forces of demand and supply. 22. For a firm to become profitable it should expand output whenever ? a) Marginal revenue is equal to marginal cost b) Marginal revenue is less than marginal cost c) Marginal revenue is greater than marginal cost d) Average revenue is greater than average cost Samvit Academy Tip: a firm is said to be in equilibrium when MC = MR. This shows the ideal output that can be produced by a firm. When MR > MC, the firm has incentive to produce more. 23. Which of the following is not the objective of price discrimination ? a) Maintaining Huge stocks b) To earn maximum profits c) Enjoying the economies of scale d) Securing equity through pricing Samvit Academy Tip: price discrimination helps the monopolist to earn more profits by selling in different markets thus enjoying economies of scale. Maintaining huge stocks is not an objective of price discrimination. 24. In oligopoly, when the industry is dominated by one large firm which is considered as leader of the group. This is called: a) Open oligopoly b) Collusive oligopoly c) Partial oligopoly d) Pure oligopoly Samvit Academy Tip: partial oligopoly is when one firm in the entire industry is a leader while the others look up to the leader 25. Production possibility curve is also known as: a) Demand curve b) Supply curve c) Indifference curve d) Transformation curve



Samvit Academy Tip: PPC is also known as transformation curve or production possibility frontier 26. Which of the following method is based on collection and analysis of facts? a) Inductive b) Deductive c) Scientific d) Experimental Samvit Academy Tip: inductive method is based on analysis of data and deriving conclusions using statistical techniques. 27. Which economic system is described by Schumpeter as “capitalism in the oxygen tent”? a) Laissez faire economy b) Command economy c) Mixed economy d) Agrarian economy Samvit Academy Tip: Schumpeter defined mixes economy as " capitalism in an oxygen tent " 28. Water supply and construction comes under which sector? a) Primary b) Secondary c) Tertiary d) Social Samvit Academy Tip: water and construction comes under the Manufacturing sector or secondary sector. 29. Which of the following statement is correct ? a) In India the tertiary sector contributes maximum to the GDP. b) India is basically a socialist economy c) The distribution of income and wealth in India is quite equitable d) None of the above Samvit Academy Tip: the tertiary sector or service sector contributes maximum to gdp in India. India is a mixed economy and the distribution of income and wealth is not equal in India. 30. If in a population of 1000 people, 400 people are in the labour force, 392 are employed, what is the unemployment rate? a) 2% b) 8% c) 6% d) 4% Samvit Academy Tip: Labour force - 400 Work force - 392 Unemployed persons - 8 (400 - 392) Unemployment rate - (8/400) *100 =2% 31. Most of the unemployment in India is ______ a) Voluntary b) Structural c) Frictional d) technical



Samvit Academy Tip: the nature of unemployment in India is structural. 32. At present what is the multi-dimensional poverty index? a) 0.384 b) 0.253 c) 0.554 d) 0.283 Samvit Academy Tip: MPI is 0.283 in India. 33. In order to enhance access to secondary education and improve its quality ____ was introduced in 2009 a) Rashtriya Madhyamik Shiksha Abhiyan b) Rashtriya Uchchatar Shiksha Abhiyan c) Sarva Shiksha Abhiyan d) National Literacy Mission 34. Which programme was launched in rural India to provide accessible, affordable and quality health services in 2005. a) National health programme b) Pradhana Mantri Swasthiya Yojana c) National Rural Health Mission d) National programme for Health care of the Elders 35. Which of the following may be attributed for fast growth of service sector in India? i. Technical, structural changes have made it more efficient to outsource certain services being they were once produce within the industry ii. It has been noticed elasticity of income demand of services iii. Revolution in IT has become more possible to deliver services over long distance at reasonable cost iv . Reform in certain segments in infrastructural services have been contributed to growth of services a) i, ii b) i, iii c) i, ii, iii d) i, ii, iii, iv 36. Problem of agricultural system in India: a) Over irrigation facilities b) Over dose of fertilizers c) Slow & uneven growth d) Less people are employed in agriculture 37. Which of the following is not a function of RBI? a) Publication of statistical data related to banks b) Custodian of foreign exchange reserves c) Supervising the commercial banks d) Creation of credit for development



38. Commercial banks in India include a) Schedule banks which are included in second schedule of RBI Act 1934 b) Non schedule banks which are not included in second schedule of RBI Act 1934 c) Both a) & b) d) None Samvit Academy Tip: Commercial banks are both scheduled and non scheduled banks mentioned in the second schedule of the RBI Act 39. An increase in Reserve Repo rate causes? a) Banks transfer more funds to RBI b) It can cause money drawn out of banking system c) Both a) & b) d) None Samvit Academy Tip: reverse repo rate is the rate at which the RBI borrows funds from Commercial banks. If Reverse REPO is increased, rate of interest charged by Commercial banks will increase as a result of which Commercial banks will want to lend more to the RBI and have less funds to lend to the public decreasing money supply in the economy 40. What is base year considered for WPI? a) 2004-05 b) 2005-06 c) 2006-07 d) 2007-08 Samvit Academy Tip: 2004-05 was selected as the base year as prices of commodities did not fluctuate much. 41. Money in dynamic sense means: a) It directs economic trends b) It encourages division of labour c) It smoothens transformation of savings into investments d) All of the above 42. Which of the following committee modified direct and indirect taxes? a) Chellaiah committee b) Bhoota Lingam committee c) Both Chellaiah committee and Bhoota Lingam committee d) C. Rangarajan Committee Samvit Academy Tip: Raja chellaiah committee modified direct taxes and the Bhoota Lingam Committee rationalised and modified the tax structure. 43. _______ measures that part of government expenditure which is not financed by borrowings a) Budget deficit b) Fiscal Deficit c) Public debt d) Induced expenditure



Samvit Academy Tip: when government borrowings and other liabilities are added to budget deficit, we get fiscal deficit. It represents the expenditures of the Government which are not financed by Government borrowings. 44. Debt service ratio means a) Principal and interest to external exports b) Principal to net trade c) Total external borrowings to net foreign trade d) Interest to loans Samvit Academy Tip: debt service ratio shows how much portion of external debt can be financed by exports. 45. Which is not included in the World Bank? a) Asian Development Bank b) International Development Association c) Multilateral investment Guarantee Agency d) International Centre of Settlement of Investment Disputes. 46. Which of the following objectives are taken to promote globalization ? a) Convertibility of rupee and import liberalisation b) Import substitution & export promotion c) Import & export promotion policies d) Demonetisation of Rs. 500 & Rs. 1000 notes. Samvit Academy Tip: India is trying to achieve full convertibility on capital account transactions. Options A is the better option amongst others. 47. NNPFC plus ____ is equal to NNPMP a) Subsides b) Indirect taxes plus subsidies c) Indirect taxes minus subsides d) Indirect taxes Samvit Academy Tip: NNPFC + Indirect taxes - subsidies = NNPMP 48. 49. 50.



IPCC (NEW SCHEME) ORIENTATION

JULY 16TH

, 2017

What you need to know ICAI has introduced a new scheme of training starting from July 1, 2017 After clearing CPT you will be into the new scheme for IPCC Some subjects have been removed, some subjects have been modified Why is Samvit Academy the best in Bangalore? Samvit Academy is the only academy to consistently have the highest pass % in Bangalore over the years Within 1 year, one of our students secured 176 in CPT, the highest in Bangalore in that attempt Within 2 years, we produced an All-India Rank in IPCC an attempt which saw a pass percentage of 4% when other academies were struggling to help students get even the passing marks Quality coaching supplemented with regular tests which ensure you are well prepared before the exam 100% track record of completing syllabus and more importantly completing it within time All-India Rank Holders are going to be teaching you. One of our faculty has secured All- India Ranks in ALL 3 LEVELS of CA and another faculty has secured an All-India Rank in CPT All our faculty have cleared CA in their first attempt making them the best in this field

Or send an SMS/WhatsApp to 9845861108 with your name to register

(It is free of cost to attend but pre-registration is necessary. It is on a first-come first-serve basis)

Venue - Malleshwaram 7th Cross opp Malleshwaram Grounds (Near Sri Krishna Sweets and CTR) Timings 6 pm - 7 pm followed by refreshments BRING YOUR PARENTS ALONG

Register for IPCC Orientation

http://www.samvitacademy.in/orientation



If you found this useful, let us know by sending a message to 9845861108 or an email to [email protected] If you are in Bangalore and would like to attend our classes for CPT or IPCC, let us know through phone or email (details above) and we will ensure that you get the best from our amazingly young and brilliant faculty. We wish you the best! Our next CPT Batch starts in July and IPCC Batch starts in August in Malleshwaram, Rajajinagar and Jayanagar.

Get to know our faculty

CA. Gaurav Rajaram - All India Rank Holder in CPT. Cleared CA in his first attempt.

Teaches Accounting and Direct Taxes

CA. Chinmaya Hegde - All India Rank holder in ALL 3 levels of CA! Teaches Financial

Management and Accounting

CA. Punarvas Jayakumar - The best teacher for Law in Bangalore and probably even the South of India. Cleared CA in his first shot although he was from a science background

CA. Kriti Goel - Amazing at Cost Accounting and Economics, she has been able to achieve tremendous results in her classes. She makes it fun and makes you love her subjects

Please read our disclaimer These questions have been compiled by Samvit Academy ('we') from Online Sources who have in turn compiled the same from students memory as well from our own discussions with students who have written the examination. We cannot give any assurance that the same/similar questions appeared in the examination as it is purely based on memory. Any conclusions that you draw from the above questions and solutions are solely at your risk and we are not responsible for the same.

at samvit, we don't just help you clear. we care for you ca cpt june 2017 with... ·...

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