UGC NET Paper II in Management { 2012 December }

1. The term Opportunity Cost refers to

(A) Variable Cost

(B) Short-run cost

(C) The cost forgone in favour of production of another product

(D) Cost related to an optimum level of production

Answer: (C)

2. If two commodities are complementary, then a rise in the price of one commodity will induce

(A) A rise in the price of the other commodity

(B) An upward shift of demand curve

(C) No shift in demand for the other commodity

(D) A backward shift in demand for the other commodity

Answer: (D)

3. What is the characteristic of a purely competitive market?

(A) Large number of buyers and sellers

(B) A few sellers

(C) A few buyers

(D) Abnormal profit

Answer: (A)

4. Willingness to pay minus actual payment is called

(A) Consumer’s surplus

(B) Producer’s surplus

(C) Utility cost

(D) Supplier’s surplus

Answer: (A)

5. Match List – I with List – II and select the correct answer using the codes given below the lists:

List – I                                    List – II

a. Cost Function                      1. Kinky Demand Curve

b. Supply Function                  2. Isoquants

c. Production Function           3. Engineering Method

d. Oligopoly                            4. Factor Prices


       a b c d

(A) 3 4 2 1

(B) 4 3 1 2

(C) 3 2 1 4

(D) 1 2 3 4

Answer: (A)

6. When analysing your business and its environment, it is useful to carefully inspect

(A) Threats

(B) Opportunities

(C) Strengths and weaknesses

(D) All of the above

Answer: (D)

7. Which of the following is an example of an external threat?

(A) Decreased competition

(B) New Trade Regulations

(C) Global Sales Potential

(D) Economies of Scale

Answer: (B)

8. Expectancy Theory of Motivation was propounded by

(A) Porter and Lawler

(B) McGregor

(C) Vroom

(D) J. Stacy Adams

Answer: (C)

9. Which one of the following is not a step in planning?

(A) Establishing objectives

(B) Developing premises

(C) Determining alternative courses

(D) Identifying needs of employees

Answer: (D)

10. Planning is looking ahead and control is

(A) Scanning environment

(B) Looking back

(C) Setting targets

(D) Defining objectives

Answer: (B)

11. Human Resource Management (HRM) is a part of the broad Human Resource Development (HRD) System, as this focus to

(A) Selection, Induction, Training and Development

(B) Operational and Organisational Options

(C) (A) and (B) above

(D) None of the above

Answer: (C)

12. Performance Appraisal is a double edged tool to

(A) Create space for the employee to organisationally survive.

(B) Offering challenges for promotion.

(C) Accompanying the course of Demotion.

(D) All of the above.

Answer: (D)

13. Wage determination is mostly done through tools which are

(A) Objective

(B) Subjective

(C) Both of (A) & (B)

(D) None of these

Answer: (C)

14. Job Evaluation criterion comes from

(A) Job manual

(B) Job description

(C) Job specification

(D) Job duration

Answer: (C)

15. Exit Policy primarily emphasises in the broad sense, for policy makers as

(A) Removing employees

(B) Down sizing

(C) Retiring people and rehabilitating them

(D) Bringing new blood to the Corporate

Answer: (C)

16. The goal of financial management is to _______

(A) Maximise the wealth of Preference Shareholders

(B) Maximise the wealth of Debenture holders

(C) Maximise the wealth of Equity shareholders

(D) All of the above

Answer: (C)

17. The Internal Rate of Return (IRR) is determined where

(A) The Net Present Value is positive

(B) The Net Present Value is negative

(C) The Net Present Value is zero

(D) None of the above

Answer: (C)

18. The Tax shield would result in

i. increase in tax liability

ii. Increase in EPS

iii. Decrease in EPS

iv. Decrease in tax liability


(A) (ii) and (iv)

(B) (i) and (iii)

(C) (i) and (iv)

(D) (iii) and (iv)

Answer: (A)

19. Which of the following is a main method of issue of stocks?

(A) Vendor placing

(B) Public issue through Prospectus

(C) Private placements

(D) None of the above

Answer: (B)

20. The Capital Asset Pricing Model (CAPM) establishes the relationship between

(A) Risk and EPS

(B) Risk and value of the firm

(C) Risk and the required rate of return

(D) None of the above

Answer: (C)

21. ‘Marketing is a human activity directed at satisfying needs and wants through Exchange process’; is the statement of

(A) Cundiff ad still

(B) Kenneth Andrews

(C) Philip Kotler

(D) Kishwar S. Kan

Answer: (C)

22. Promotion mix includes

(A) Advertising, publicity, personal selling and sales promotion

(B) Physical attributes, brand, package and product life cycle

(C) Brand name, product benefits, delivery and credit

(D) Transportation, material handling, packaging and customer service

Answer: (A)

23. Which of the following is not the stage of product life cycle?

(A) Introduction

(B) Growth

(C) Market segmentation

(D) Decline

Answer: (C)

24. Which is the basic form of Innovation?

(A) Introduction of novel production process

(B) Improvement and development of existing process

(C) Improvement and development of existing firm

(D) All of the above

Answer: (D)

25. The scientific system of collecting and analysis of data pertaining to market is known as

(A) Production Research

(B) Advertising Research

(C) Marketing Research

(D) None of the above

Answer: (C)

26. Which one of the following is not the function of Production Management?

(A) Production, Planning and Control

(B) Procurement of Raw Materials

(C) Market Intelligence and Survey

(D) Plant Location and Layout

Answer: (C)

27. Time study refers to

(A) Developing a standard time to do a particular task

(B) Improving work methods

(C) Value analysis

(D) Value engineering

Answer: (A)

28. Acceptance Quality level is

(A) Maximum number of defectives that the consumers will accept

(B) Fraction defective(s) that the consumer considers acceptable

(C) Fraction defective(s) that the producer considers acceptable

(D) Maximum number of defectives that the producer will allow

Answer: (B)

29. In a transportation problem involving 10 origins and 5 destinations, the number of constraints representing origin capacity and destination requirements is equal to

(A) 50

(B) 49

(C) 15

(D) 14

Answer: (C)

30. The critical path of a network is

(A) For which earliest start time and latest start time are same

(B) The shortest time path through a network

(C) For which earliest finish time and latest finish time are same

(D) The longest time path through a network

Answer: (B)

31. If a person buys one ticket of a State lottery, then the probability that he wins a price is 0.11. If a person buys one ticket each month for five months, what is the probability that he will win least one price?

(A) 0.55

(B) 0.50

(C) 0.44

(D) 0.56

Answer: (C)

32. The standard error of the mean of a random sample of size two or more.

(A) Always exceeds the population standard deviation.

(B) Either exceeds or equals the population standard deviation.

(C) is always lower than the population standard deviation

(D) is always equal to the population standard deviation.

Answer: (C)

33. A store manager is trying to explore the relationship between percentage fat content (Y) and price (X) of various dairy products. He finds that the coefficient of determination is 0.4624 and the estimated regression line is Y = 0.5 – 0.02 X. The coefficient of correlation would be

(A) 0.68

(B) – 0.68

(C) – 0.02

(D) 0.4624

Answer: (B)

34. Which of the following statement on testing of hypothesis is always true?

(A) When the null hypothesis is rejected at 5%, it is always rejected at 1% level of significance.

(B) When the null hypothesis is rejected at 1%, it is also rejected at 5% level of significance.

(C) When the null hypothesis is not rejected at 1%, it is rejected at 5% level of significance.

(D) No definite assertion can be made.

Answer: (B)

35. Which of the following devices would be considered a typical sequential access medium?

(A) Magnetic Hard Disk

(B) Magnetic Floppy Disk

(C) Magnetic Tape


Answer: (C)

36. What describes the market, product and technological areas of business?

(A) BCG Matrix

(B) GE Nine Cell Matrix

(C) 7’s framework

(D) Company’s Mission

Answer: (D)

37. Name the factors taken into consideration in Internal Analysis

(A) Firm Resources

(B) Objective, plans and policies of the firm

(C) The type of business involved

(D) All of the above

Answer: (D)

38. Diversification is to a new business area that has no obvious connection with any of the company’s existing areas refer to

(A) Forward integration

(B) Backward integration

(C) Conglomerate diversification

(D) Concentric diversification

Answer: (D)

39. Which business unit generates substantial cash surplus due to low industry growth rate and high profit share?

(A) Dog

(B) Cash cow

(C) Question mark

(D) Star

Answer: (B)

40. Who plays an important role in the success of products and services and in increasing the marketing share of the firm in business?

(A) Functional level Managers

(B) Corporate level Managers

(C) Business level Managers

(D) All of the above

Answer: (D)

41. Entrepreneurship as a theory of business was propounded by

(A) Douglas McGregor

(B) Thomas A. Coleman

(C) Joseph A. Schumpeter

(D) Adam Smith

Answer: (C)

42. Policies related to Revival of Sick Units are framed by





Answer: (D)

43. The book ‘Innovation and Entrepreneurship’ is written by

(A) Harold Koontz

(B) Blake and Mouton

(C) Peter F. Drucker

(D) None of the above

Answer: (C)

44. State Financial Corporation Act encourages in

(A) Establishing Industrial Estates

(B) Establishing small and medium size industries

(C) Establishing Agricultural Farms

(D) All of the above

Answer: (B)

45. Name the Author of Equity Theory of Motivation.

(A) Blake & Mouton

(B) Strube & Garcia

(C) Stancy Adams

(D) Albert Bandura

Answer: (C)

46. Anything dealing with Ethics in Business is

(A) Good, bad or both, to the business gains

(B) Not related to religion

(C) Not to focus obligation

(D) Killing all types of Unfair Trade Practices

Answer: (A)

47. Ethics provide

(A) Consumer Autonomy


(C) Justice

(D) All of the above

Answer: (D)

48. Company seeking ethical standard must purport to

(A) Good Employee Relation

(B) Better Production Portfolio

(C) Economy of Scale

(D) Public Disclosure and Publishing

Answer: (D)

49. Which of the following is not the act of Corporate Governance?

(A) Protecting the interest of shareholders

(B) Protecting the interest of employees

(C) Fudging of Accounts

(D) Paying Taxes to the Government

Answer: (C)

50. Corporate Social Responsibility (CSR) is looked as the organised network of making long economic and social relationship of the corporate with the society. But a business of which type, as mentioned below, cannot afford for it, at the first instance?

(A) Large Business

(B) Medium Business

(C) Small Business

(D) A Business Start-up

Answer: (D)

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