Question 1
A product is likely to have a price elasticity of demand that exceeds 1 when.
Its price falls
It is a necessity
It has close substitutes
The percentage of income spent on it decreases
Business Data Management Quiz 1: 5 June 2022 (May 2022 term)
The IIT Madras BS Business Data Management (BDM) Quiz 1 paper sat on 5 Jun 2022, in the May 2022 term: 20 questions for 20 marks in 120 minutes. Every question is below with its answer. Take it as a timed mock test to be marked, or read it through first.
- 20
- 20
- 120 min
- 4
- 8
- 8
Show answer
Correct answer
It has close substitutes
Question 2
Match the “Definition” in Colum-X to its appropriate “Ratio” in Column-Y.
| Column-X | Column-Y |
|---|---|
| 1. The ability of the firm to pay its way | A. Profitability Ratio |
| 2. Information to enable decisions to be made on the extent of risk and earning potential of a business investment | B. Gearing Ratio |
| 3. Information on relationship between the exposure of the business to loans as opposed to share capital | C. Investment Ratio |
| 4. How effective the firm is at generating profits given sales | D. Financial Ratio |
| E. Liquidity Ratio |
1-E, 2-C, 3-B, 4-A
1-E, 2-C, 3-B, 4-D
1-B, 2-C, 3-E, 4-A
1-B, 2-C, 3-E, 4-D
Show answer
Correct answer
1-E, 2-C, 3-B, 4-A
Question 3
The strength of the five forces in the “Five Forces Model” helps determine ___________ within an industry that a competitor can expect.
Level of profit
Level of competitiveness
Level of mark share
Level of monopoly
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Correct answer
Level of profit
Question 4
Which of the following is not one of the five key indicators in Purchasing Manager’s Index (PMI)?.
New orders
Employment environment
Supplier Deliveries
Competitor Analysis
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Correct answer
Competitor Analysis
Question 5
If gross profit = net profit + x, which of the following statements is/ are true? (select all that is applicable).
“X” includes variable cost
“X” includes the cost of goods sold (e.g.: building, equipment, etc.)
“X” includes the indirect expenses (e.g.: operating, interest, taxes, etc.)
None of these
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Correct answer
“X” includes the indirect expenses (e.g.: operating, interest, taxes, etc.)
Question 6
Which of the following is not a source of survey data? (select all that is applicable).
Stock market data
Market research data
Consumer pyramid data
None of these
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Correct answer
Stock market data
Question 7
When a company operates in a monopolistic market (assume it is 100% monopolistic), which of the following forces in the “Five Forces Model” becomes unimportant for the company (choose all that are applicable)?.
Bargaining power of suppliers
Bargaining power of customers
Threat of substitutes
Threat of new entrants
None of these
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Correct answers
Bargaining power of customers
Threat of substitutes
Question 8
The Board of Directors of Company-X have met and a discussion on acquiring another company-Y is underway. A competitor firm wants to stop this merger due to fears that the market will become monopolistic. So, the competitor has approached the justice department. Then which of the following statements will assist the competitor’s claim?.
As the acquisition will cause the Herfindahl Index of the industry to change from 2000 to 8000 it should not be permitted
As the acquisition will cause the Herfindahl Index of the industry to change from 8000 to 2000 it should not be permitted
The 4-firm concentration ratio will change from 52% to 84% and hence must not be permitted
The 4-firm concentration ratio will change from 84% to 52% and hence must not be permitted
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Correct answers
As the acquisition will cause the Herfindahl Index of the industry to change from 2000 to 8000 it should not be permitted
The 4-firm concentration ratio will change from 52% to 84% and hence must not be permitted
Question 9
The table provides data on rice sold (25Kg Bags) and price (Rs./ 25Kg Bag) at a rice wholesaler for the first 5 months of the year. Then answer the given subquestions.
Based on price elasticity, which of the following pairs of Months indicate that Rice is an elastic item?.
Month 1 to Month 2
Month 2 to Month 3
Month 3 to Month 4
Month 4 to Month 5
None of these
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Correct answers
Month 1 to Month 2
Month 2 to Month 3
Month 4 to Month 5
Question 10
The table provides data on rice sold (25Kg Bags) and price (Rs./ 25Kg Bag) at a rice wholesaler for the first 5 months of the year. Then answer the given subquestions.
Based on price elasticity, which of the following pairs of Months indicate that Rice is an inelastic item?.
Month 1 to Month 2
Month 2 to Month 3
Month 3 to Month 4
Month 4 to Month 5
None of these
Show answer
Correct answer
Month 3 to Month 4
Question 11
The table below provides information on the number of items sold by different firms in a month. With this information, answer the given subquestions.
| Firm | Number of units sold |
|---|---|
| A | 1200 |
| B | 3000 |
| C | 1500 |
| D | 1000 |
| E | 2600 |
| F | 4500 |
| G | 1100 |
| H, I, J, K, L, M | 5100 |
What is the 5-firm Concentration ratio (round your answer to 2 decimal places)?
Show answer
Correct answer: 64.5 (accepted within ±0.5)
Question 12
The table below provides information on the number of items sold by different firms in a month. With this information, answer the given subquestions.
| Firm | Number of units sold |
|---|---|
| A | 1200 |
| B | 3000 |
| C | 1500 |
| D | 1000 |
| E | 2600 |
| F | 4500 |
| G | 1100 |
| H, I, J, K, L, M | 5100 |
What is the HHI for the industry (round your answer to 2 decimal places)?.
Show answer
Correct answer: 1047.5 (accepted within ±0.5)
Question 13
The table below provides information on the number of items sold by different firms in a month. With this information, answer the given subquestions.
| Firm | Number of units sold |
|---|---|
| A | 1200 |
| B | 3000 |
| C | 1500 |
| D | 1000 |
| E | 2600 |
| F | 4500 |
| G | 1100 |
| H, I, J, K, L, M | 5100 |
How is the industry based on the HHI?.
Monopolistic
Acute concentration
Moderately concentration
Oligopolistic
Cannot say
Show answer
Correct answer
Moderately concentration
Question 14
The following table gives the sales and purchases of eggs at a Kirana store. With this information, answer the given subquestions assuming a linear relationship between price and quantities.
What is the market-clearing price for eggs?
NOTE: Enter your answer to the nearest integer.
Show answer
Correct answer: 3
Question 15
The following table gives the sales and purchases of eggs at a Kirana store. With this information, answer the given subquestions assuming a linear relationship between price and quantities.
How many eggs will be purchased at the market-clearing price?
NOTE: Enter your answer to the nearest integer.
Show answer
Correct answer: 14
Question 16
The following table gives the sales and purchases of eggs at a Kirana store. With this information, answer the given subquestions assuming a linear relationship between price and quantities.
Any price higher than the market-clearing price will lead to (choose all that is applicable)?
More eggs being purchased
More eggs being sold
Less eggs being purchased
Less eggs being sold
Will have no impact on the eggs being purchased or sold
Show answer
Correct answers
More eggs being sold
Less eggs being purchased
Question 17
A company wants to start manufacturing a product that will be sold in a competitive market at a price of Rs.15 each. Estimates indicate that a fixed cost of Rs. 10 will be incurred every day. The total variable cost (in Rs.) and the corresponding number of units that can be produced in a day (at the specified total variable cost) are provided in the table below. With this information, answer the given subquestions.
| Total Variable Cost (Rs.) | Number of Units Produced (units/day) |
|---|---|
| 0 | 0 |
| 8 | 13 |
| 10 | 15 |
| 12 | 20 |
| 15 | 22 |
| 17 | 25 |
| 20 | 27 |
How many items should the company be recommended to produce?.
NOTE: Enter your answer to the nearest integer.
Show answer
Correct answer: 13
Question 18
A company wants to start manufacturing a product that will be sold in a competitive market at a price of Rs.15 each. Estimates indicate that a fixed cost of Rs. 10 will be incurred every day. The total variable cost (in Rs.) and the corresponding number of units that can be produced in a day (at the specified total variable cost) are provided in the table below. With this information, answer the given subquestions.
| Total Variable Cost (Rs.) | Number of Units Produced (units/day) |
|---|---|
| 0 | 0 |
| 8 | 13 |
| 10 | 15 |
| 12 | 20 |
| 15 | 22 |
| 17 | 25 |
| 20 | 27 |
What is the total profit that the company makes if the recommended number of products (identified in the previous question) are produced?.
NOTE: Enter your answer to the nearest integer.
Show answer
Correct answer: 81 (accepted within ±1)
Question 19
A company wants to start manufacturing a product that will be sold in a competitive market at a price of Rs.15 each. Estimates indicate that a fixed cost of Rs. 10 will be incurred every day. The total variable cost (in Rs.) and the corresponding number of units that can be produced in a day (at the specified total variable cost) are provided in the table below. With this information, answer the given subquestions.
| Total Variable Cost (Rs.) | Number of Units Produced (units/day) |
|---|---|
| 0 | 0 |
| 8 | 13 |
| 10 | 15 |
| 12 | 20 |
| 15 | 22 |
| 17 | 25 |
| 20 | 27 |
What is the average total cost if the recommended number of products (identified in the previous question) is produced [Note: Round your answer to two decimal places]?
Show answer
Correct answer: 8.75 (accepted within ±0.05)
Question 20
A company wants to start manufacturing a product that will be sold in a competitive market at a price of Rs.15 each. Estimates indicate that a fixed cost of Rs. 10 will be incurred every day. The total variable cost (in Rs.) and the corresponding number of units that can be produced in a day (at the specified total variable cost) are provided in the table below. With this information, answer the given subquestions.
| Total Variable Cost (Rs.) | Number of Units Produced (units/day) |
|---|---|
| 0 | 0 |
| 8 | 13 |
| 10 | 15 |
| 12 | 20 |
| 15 | 22 |
| 17 | 25 |
| 20 | 27 |
What is the marginal cost if the recommended number of products (identified in the previous question) is produced [Note: Round your answer to two decimal places]?.
Show answer
Correct answer: 7.95 (accepted within ±0.15)