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January 2026 term · Managerial Economics · BSMS3033

Managerial Economics Quiz 2: 12 April 2026 (January 2026 term)

The IIT Madras BS Managerial Economics (Managerial Economics) Quiz 2 paper sat on 12 Apr 2026, in the January 2026 term: 27 questions for 25 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.

Questions
27
Marks
25
Duration
120 min
MCQ
12
Numerical
15
Take as mock testPractise with answers

Updated

Official paper: Managerial Economics 06 Apr 26 · No negative marking.

Question 1

+0.5 marksOne correct option

Quasi-linear preferences are linear in both the goods

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • B

    False

Question 1 on its own page

Question 2

+0.5 marksOne correct option

Marginal utility does not change for a monotonic transformation of the utility function

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • B

    False

Question 2 on its own page

Question 3

+0.5 marksOne correct option

MRS does not change for a monotonic transformation of utility function

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • A

    True

Question 3 on its own page

Question 4

+0.5 marksOne correct option

The fraction of quantity tax paid by buyers rises as supply becomes more own-price elastic

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • A

    True

Question 4 on its own pageAlso asked in Quiz 2 16 Mar 2025

Question 5

+0.5 marksOne correct option

The fraction of quantity tax paid by buyers rises as demand becomes more own-price elastic

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • B

    False

Question 5 on its own pageAlso asked in Quiz 2 16 Mar 2025

Question 6

+0.5 marksOne correct option

A monopolist always produces in the inelastic region of market demand curve

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • B

    False

Question 6 on its own pageAlso asked in Quiz 2 16 Mar 2025

Question 7

+0.5 marksOne correct option

Consider the following game matrix where only the payoff of player 1 is given.

Based on the above data, answer the given subquestions.

M weakly dominates T

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • A

    True

Question 7 on its own page

Question 8

+0.5 marksOne correct option

Consider the following game matrix where only the payoff of player 1 is given.

Based on the above data, answer the given subquestions.

B strictly dominates M

  1. A

    True

  2. B

    False

Show answer

Correct answer

  • B

    False

Question 8 on its own page

Question 9

+1 markOne correct option

Based on the above data, answer the given subquestions.

Choose the correct alternative

  1. A

    Marginal utility of Food is independent of C

  2. B

    Marginal utility of Clothing is independent of F

  3. C

    Both Marginal utility of Food is independent of C & Marginal utility of Clothing is independent of F

  4. D

    None

Show answer

Correct answer

  • D

    None

Question 9 on its own page

Question 10

+1 markOne correct option

Based on the above data, answer the given subquestions.

What is true about the optimal bundle of Anita

  1. A

    The optimal bundle lies on X-axis

  2. B

    The optimal bundle lies on Y-axis

  3. C

    Budget line is a tangent to Anita’s indifference curve at optimal bundle

  4. D

    None

Show answer

Correct answer

  • C

    Budget line is a tangent to Anita’s indifference curve at optimal bundle

Question 10 on its own page

Question 11

+1 markNumerical answer

Based on the above data, answer the given subquestions.

Optimal quantity of food is F*= ______________

Show answer

Correct answer: 12

Question 11 on its own page

Question 12

+1 markNumerical answer

Based on the above data, answer the given subquestions.

Optimal quantity of clothing is C*=_____________

Show answer

Correct answer: 5

Question 12 on its own page

Question 13

+1 markNumerical answer

Based on the above data, answer the given subquestions.

Utility of Anita from optimal bundle is U(F*, C*) = _______________

Show answer

Correct answer: 72

Question 13 on its own page

Question 14

+1 markNumerical answer

Based on the above data, answer the given subquestions.

What is the marginal rate of substitution of food for clothing when utility is maximized? MRS (F for C) = _______________

Show answer

Correct answer: 0.5

Question 14 on its own page

Question 15

+1 markNumerical answer

Equilibrium quantity (in millions) in the market before the subsidy Q* = _____________

Show answer

Correct answer: 6

Question 15 on its own page

Question 16

+1 markNumerical answer

Equilibrium price in the market before the subsidy P * = ______________

Show answer

Correct answer: 8

Question 16 on its own page

Question 17

+1 markNumerical answer

New equilibrium quantity after the subsidy Qs = _____________

Show answer

Correct answer: 7

Question 17 on its own page

Question 18

+1 markNumerical answer

Price that buyers pay now will be PB = ______________

Show answer

Correct answer: 6

Question 18 on its own page

Question 19

+1 markNumerical answer

Price that the producers receive per unit will be Ps = _____________

Show answer

Correct answer: 9

Question 19 on its own page

Question 20

+1 markNumerical answer

Total cost (in million $) to the government will be _____________

Show answer

Correct answer: 21

Question 20 on its own page

Question 21

+1 markNumerical answer

Suppose the government acts weird and removes the subsidy to impose a excise tax of $6 per unit to producers.
New equilibrium quantity (in Millions) after the incidence of tax Qt = ___________

Show answer

Correct answer: 4

Question 21 on its own page

Question 22

+1 markNumerical answer

Suppose the government acts weird and removes the subsidy to impose a excise tax of $6 per unit to producers.
Price that buyers pay now will be PB = _____________

Show answer

Correct answer: 12

Question 22 on its own page

Question 23

+1 markNumerical answer

Suppose the government acts weird and removes the subsidy to impose a excise tax of $6 per unit to producers.
Price that seller receives per unit will be PS = ______________

Show answer

Correct answer: 6

Question 23 on its own page

Question 24

+1 markOne correct option

Based on the above data, answer the given subquestions.

What level of output (q) the firm will produce?

  1. A

    2

  2. B

    3

  3. C

    4

  4. D

    5

Show answer

Correct answer

  • B

    3

Question 24 on its own page

Question 25

+1 markOne correct option

Based on the above data, answer the given subquestions.

Producer surplus of the firm is

  1. A

    7

  2. B

    8

  3. C

    9

  4. D

    6

Show answer

Correct answer

  • C

    9

Question 25 on its own page

Question 26

+2 marksNumerical answer

Based on the above data, answer the given subquestions.

How much labor (Hours of labor per week) would the monopsonist hire to maximize profit?
L*= _________________

Show answer

Correct answer: 12000

Question 26 on its own page

Question 27

+2 marksNumerical answer

Based on the above data, answer the given subquestions.

What wage rate (per hour) would the monopsonist pay, to maximize profit?
w*= _____________

Show answer

Correct answer: 26

Question 27 on its own page