✅ Correct Answer: Corporate Governance

📘 Explanation:

The passage explicitly states that the primary objective of the committee under Shri Kumar Mangalam Birla was to promote and raise the standards of good corporate governance. The committee prepared a ‘Code’ to suit the Indian corporate environment, which aligns with the topic of Corporate Governance.

❌ Investors' Protection – This is not the primary focus of the committee as mentioned in the passage.

❌ Investors and Shareholders Awareness – While the committee views corporate governance from the perspective of investors and shareholders, the main focus is on corporate governance, not awareness.

❌ SEBI Guidelines on Market Operations – The passage does not refer to market operations or SEBI guidelines on that aspect.

✅ Final Answer: Corporate Governance

✅ Correct Answer: A and E only

📘 Explanation:

A. ✅ True – The slope of an indifference curve shows the Marginal Rate of Substitution (MRS) between two goods, indicating how much of one good a consumer is willing to give up to get one more unit of another good.

B. ❌ False – For perfect substitutes, the indifference curve is a straight line with a negative slope, not positive. A positive slope would contradict the principle of diminishing MRS.

C. ❌ False – Indifference curves never intersect, even for perfect complements. Intersecting curves would violate the assumption of transitivity of preferences.

D. ❌ False – Indifference curves do not intersect under any condition. Doing so implies inconsistent consumer behavior.

E. ✅ True – In the case of perfect substitutes, the indifference curves are straight lines, indicating a constant MRS.

✅ Final Answer: A and E only

✅ Correct Answer: Organizations are experiencing acute pressure to change and pursue innovation as a means of securing business growth

✅ Explanation:
Bureaucratic structures are being questioned because modern businesses face pressure to innovate and adapt quickly to market changes. Bureaucracy, with its rigid rules and hierarchy, often hinders flexibility and creativity, making it harder for organizations to keep up with the fast pace of innovation and global competition. This lack of agility makes bureaucratic systems less suitable for today’s dynamic business environment.

❌ Why the other options are incorrect:

• Pressure of Globalization: This is a contributing factor but not the fundamental reason. The primary reason is the need for organizations to change and innovate rapidly.

• Organizations have grown so large: This is an outcome of growth, but it is more about innovation pressure rather than the inability to manage scale.

• Information Technology: IT may improve efficiency but does not fundamentally challenge the bureaucratic structure. The issue is the lack of flexibility in responding to market demands.

✅ Final Answer: Organizations are experiencing acute pressure to change and pursue innovation as a means of securing business growth.

✅ Correct Answer: A, B, and D only

📘 Explanation:

The passage clearly states:

“The non-mandatory recommendations were to apply to all the listed private and public sector companies, their directors, management, employees, and professionals associated with such companies.”

This directly confirms:

• ✅ A. Listed private companies – Mentioned in the scope.

• ✅ B. Listed public sector companies – Also included in the scope.

• ✅ D. Professionals associated – Explicitly noted in the passage.

❌ C. Shareholders – Not mentioned as part of the group to whom non-mandatory recommendations apply.

✅ Final Answer: A, B, and D only

✅ Correct Answer: Existing boards of companies will be restructured

📘 Explanation:

The passage clearly states:

"The committee recognizes that compliance with the recommendations would involve restructuring the existing boards of companies."

This means that in order to follow the recommended governance code, companies will need to modify their current board structure.

Why other options are incorrect: ❌

❌ Foreign company can list in the Indian stock exchanges – This is not discussed in the passage at all.

❌ There will be only two categories of companies – The passage does not mention or imply a reclassification of companies into two categories.

❌ Directors will have to be re-elected – There is no mention of mandatory re-election of directors in the passage.

✅ Final Answer: Existing boards of companies will be restructured

✅ Correct Answer: 24 units

✅ Explanation:
At equilibrium, quantity demanded (Qd) equals quantity supplied (Qs). To find the equilibrium price, set the two equations equal:

Qd = Qs

Now solve for P (price):

30 - 3P = 20 + 2P
30 − 20 = 2P + 3P ⇒ 10 = 5P ⇒ P = 2

Now plug P = 2 back into either the demand or supply equation to find the equilibrium quantity:

Using the demand equation:

Qd = 30 − 3(2) = 30 − 6 = 24

Or supply equation:

Qs = 20 + 2(2) = 20 + 4 = 24

So, the equilibrium demand (and supply) is 24 units.

✅ Final Answer: 24 units.

✅ Correct Answer: Midvale Steel Company

📘 Explanation:

The passage clearly states, "The Midvale Steel Company, 'one of America’s great armor plate making plants,' was the birthplace of scientific management." Therefore, the correct answer is Midvale Steel Company.

❌ Bethlehem Steel Corporation and Bethlehem Steel Incorporation are not mentioned in the passage as the birthplace of scientific management.

❌ Midvale Steel Corporation is also not a correct term as per the passage; the correct term is Midvale Steel Company.

✅ Final Answer: Midvale Steel Company

✅ Correct answer: Okun's law.

✅ Explanation:
Okun’s law describes the relationship between unemployment and economic growth. Specifically, it states that for every 1% increase in the unemployment rate, a country’s GDP will be roughly an additional 2% lower than its potential GDP. Thus, it directly connects extra unemployment to a larger loss in national output.

❌ Why the other options are incorrect:

• Sacrifice ratio: Refers to the cost of reducing inflation, not unemployment — it measures how much output must be sacrificed to reduce inflation by 1%.

• Phillips curve: Shows the inverse relationship between inflation and unemployment, not the relation between unemployment and GDP loss.

• Misery index: Is the sum of inflation and unemployment rates, used to indicate the economic well-being of a country, not directly related to GDP loss.

✅ Final Answer: Okun's law.

✅ Correct Answer:  Improving investors confidence and relations.

📘 Explanation:
In the passage, it is clearly stated that corporate governance improves investors' confidence and relations. This benefit comes from its focus on transparency, financial credibility, and adherence to ethical practices.

❌ Why the other options are incorrect (i.e., they are not advantages of corporate governance):

• Hiding excessive remuneration of directors and CEOs: This contradicts the passage, as it mentions that corporate governance exposes these issues.

• Discouraging individual decision-making: The passage mentions that corporate governance may seem "time-consuming" or hinder "individual decision-making," but this is seen as a drawback, not an advantage.

• Avoiding competition: The passage does not mention avoiding competition as an advantage of corporate governance.

✅ Final Answer: Improving investors' confidence and relations.

✅ Correct Answer: Enlarging the market size.

✅ Explanation: "Sunday ho ya Monday, Roz Khao Ande"

In a perfectly competitive market, products are homogeneous and firms are price takers, so advertising is generally not used to differentiate products. However, when advertising does happen in perfect competition, it is typically aimed at enlarging the overall market size — for example, by encouraging more people to use the product category as a whole, not to promote one brand over another. Thus, advertising serves to increase overall demand rather than promote individual firms.

❌ Why the other options are incorrect:

• Informative to intimate product/service availability: Although some basic information might be shared, the primary role is enlarging the market, not just informing about availability.

• Very essential for the survival of the firm: In perfect competition, survival depends on efficiency and cost leadership, not on advertising. Firms cannot rely on selling costs to survive.

• Influencing buyer behavior: Since products are identical, advertising is not aimed at altering consumer preferences for a particular firm's product.

✅ Final Answer: Enlarging the market size.

✅ Correct Answer: Auditor of the company must have experience of 10 years

📘 Explanation:

The passage mentions the following mandatory recommendations:

• ✅ Audit committee should contain 3 independent directors with one having financial and accounting knowledge – Clearly stated.

• ✅ The Board should hold at least 4 meetings in a year with a maximum gap of 4 months between 2 meetings to review operational plans – Clearly stated.

• ✅ Director shall not be a member of more than 10 committees and shall not act as chairman of more than 5 committees across all companies – Clearly stated.

❌ Auditor of the company must have experience of 10 years – This is not mentioned in the passage as part of the mandatory recommendations.

✅ Final Answer: Auditor of the company must have experience of 10 years

✅ Correct answer: C → B → E → D → A.

✅ Explanation:
The correct chronological order of historical events in Operations Management is:

• C. Industrial Revolution (Late 18th century): Marked the shift from hand production methods to machines, leading to the birth of factories.

• B. Scientific Management (Early 20th century): Introduced by Frederick W. Taylor, focusing on improving labor productivity through scientific methods.

• E. Human Relations (1930s): Came after studies like the Hawthorne Experiments by Elton Mayo, emphasizing the importance of human factors in productivity.

• D. Operations Research (World War II, 1940s): Emerged to solve complex military operations problems using mathematical and analytical methods.

• A. Quality Revolution (1970s–1980s): Emphasized total quality management (TQM), continuous improvement, and customer satisfaction, particularly influenced by Japanese manufacturing practices.

✅ Final Answer: C → B → E → D → A.

✅ Correct Answer: A – II, B – III, C – I, D – IV

📘 Explanation:

A. Price elasticity of demand – II ✅
This is calculated as the percentage change in quantity demanded divided by the percentage change in price, showing how sensitive demand is to price changes.

B. Income elasticity of demand – III ✅
This measures how demand changes in response to changes in consumer income. It helps identify whether goods are normal or inferior.

C. Perfectly inelastic demand – I ✅
In this case, demand remains unchanged regardless of price changes. The demand curve is vertical.

D. Perfectly elastic demand – IV ✅
Here, demand drops to zero with even the slightest increase in price. The demand curve is horizontal, indicating infinite elasticity.

✅ Final Answer: A – II, B – III, C – I, D – IV

✅ Correct Answer: Two categories

📘 Explanation:

The passage mentions that the committee's recommendations are divided into mandatory and non-mandatory recommendations, which implies that the recommendations are classified into two categories.

❌ Three categories – This is not mentioned in the passage.

❌ Four categories – This is not mentioned in the passage.

❌ Five categories – This is not mentioned in the passage.

✅ Final Answer: Two categories

✅ Correct Answer: b. Scientific management, general administrative, quantitative and organisational behaviour

✅ Explanation:

The first half of the 20th century saw the emergence of several key approaches to management thinking:

1. Scientific Management – Developed by Frederick W. Taylor in the early 1900s. Focused on improving efficiency through time and motion studies, standardization, and division of labour.

2. General Administrative Theory – Advocated by Henri Fayol, focused on principles of management and organizational structure.

3. Quantitative Approach – Originated around World War II, where mathematical models and statistics were applied to decision-making (also known as Operations Research).

4. Organisational Behaviour – Developed in the 1930s–1940s, especially after the Hawthorne Studies by Elton Mayo, focusing on human behavior in the workplace and the importance of motivation and leadership.

❌ Why the other options are incorrect:

• a. Contingency approach emerged later in the 1960s, not in the first half of the 20th century.

• c. Globalisation is a modern era (post-1980s) influence, not from the first half of the 20th century.

• d. System approach came into prominence during the 1950s–1960s, not the early 20th century.

✅ Final Answer: b. Scientific management, general administrative, quantitative and organisational behaviour.

✅ Correct Answer:

• a. System approach → i. Emphasizes that decisions and actions taken in one organizational area will affect others and vice-versa

• b. Contingency approach → iv. Emphasizes that organizations are different and face different situations that require different ways of managing

• c. Quantitative approach → ii. Emphasizes on application of statistics, optimization models and computer simulations to management activities

• d. Weber's ideal bureaucracy → iii. Emphasizes on career orientation, impersonality, authority hierarchy, division of labor, formal selection etc.

✅ Explanation:

• System Approach (a → i): Views the organization as a system composed of interrelated parts. Changes in one part affect others.

• Contingency Approach (b → iv): Suggests that no single management style works for all situations; management must adapt based on context.

• Quantitative Approach (c → ii): Involves mathematical models and analytical methods to improve decision-making.

• Weber’s Ideal Bureaucracy (d → iii): Describes a structured, rule-based form of organization emphasizing efficiency and fairness through hierarchy and formal rules.

✅ Final Answer: a → i, b → iv, c → ii, d → iii

✅ Correct Answer: The process of identifying problems and opportunities and then resolving them

✅ Explanation:
Decision-making is best understood as a process, not just a one-time event. It involves:

1. Identifying a problem or opportunity

2. Gathering information

3. Evaluating alternatives

4. Choosing the best course of action

5. Implementing and reviewing the decision

This makes decision-making a systematic and dynamic process that requires judgment, analysis, and often collaboration — rather than a single act of choosing.

❌ Why the other options are incorrect:

• Decision on a particular course of action: This is just the end result of decision-making, not the process itself.

• Too self-evident requiring an answer: Some decisions may seem obvious, but that doesn’t define the nature of decision-making.

• Deciding on a choice after a series of brainstorming: Brainstorming is a technique used during the decision-making process, but it’s only one part of the whole.

✅ Final Answer: The process of identifying problems and opportunities and then resolving them.

✅ Correct answer: 2, 4 and 5 only

✅ Explanation:
For price discrimination to succeed in different markets, the following conditions must be met:

1. Firm must have some control over the price of the product (2):
   The firm must have market power (often associated with monopolistic or oligopolistic structures) to set its own prices rather than accept market prices, as would be the case in perfect competition.

2. Price elasticity of demand must differ in different markets (4):
   Different consumer groups have different price sensitivities (elasticities of demand). Firms use this to charge higher prices in inelastic markets (where consumers are less responsive to price changes) and lower prices in elastic markets (where consumers are more price-sensitive).

3. Markets for the products must be separable (5):
   The firm must be able to segregate the markets (e.g., based on geographic location, consumer income, or other criteria) and prevent resale between different market segments to maintain differentiated pricing.

❌ Why the other options are incorrect:

• Firms must have strong interdependence per se (1):
  While interdependence between firms may be relevant in oligopolistic markets, it is not a necessary condition for price discrimination to occur. Price discrimination can be practiced even in markets with no interdependence.

• Differentiated products and strong entry restrictions (3):
  While product differentiation helps in price discrimination, strong entry restrictions are not a mandatory condition. Price discrimination can happen even in less restrictive markets.

✅ Final Answer: 2, 4 and 5 only

✅Correct answer: An open democratic system with some drawbacks.

✅ Explanation: The passage describes corporate governance as an open democratic system, but also highlights some drawbacks, such as appearing "long-winded or time-consuming" and hindering "individual decision-making." It acknowledges that while corporate governance improves transparency and helps detect fraud early, no system can completely eliminate fraudulent practices.

❌ Why the other options are incorrect:

• Time ensuring but effective: While the passage does mention that corporate governance can be time-consuming, it doesn't specifically label it as "time ensuring but effective."

• Hindering the risk of fraud: The passage suggests that corporate governance helps detect fraud early, but it does not imply that it entirely hinders fraud.

• A system capable of removing fraudulent activities 100%: The passage clearly mentions that no system can remove fraudulent practices fully, making this option incorrect.

✅ Final Answer: An open democratic system with some drawbacks.

✅ Correct Answer: Statement I is correct but Statement II is incorrect

🧠 Explanation:

• Statement (I): ✅ Correct
  Planning premises are indeed the anticipated environment in which plans are expected to operate. They include assumptions or forecasts of future conditions that could affect the plan's execution.

• Statement (II): ❌ Incorrect
  There should be a distinction between forecasts used as planning premises (which guide the formulation of plans) and forecasts that are outcomes of those plans (e.g., financial projections). The former are inputs to planning; the latter are results of the planning process.

✅ Final Answer: Statement I is correct but Statement II is incorrect

✅ Correct Answer: Statement I is incorrect but Statement II is correct

🧠 Explanation:

• Statement (I): ❌ Incorrect
  The passage clearly states that CSR is a holistic and integrated management concept whereby companies integrate their social and environmental objectives with their business objectives — not industrial and future objectives. So this statement is factually incorrect.

• Statement (II): ✅ Correct
  This is a direct and accurate reflection of the opening line of the passage:
  "In this modern digitalized world, businesses are required to be mindful both in terms of what they are doing and how they are doing it."
  Hence, this statement is correct.

✅ Final Answer: Statement I is incorrect but Statement II is correct.

✅ Correct Answer: The Stackelberg Model

✅ Explanation:
The Stackelberg Model is a classic oligopoly model that describes a situation where one firm (the leader) sets its output level first, and the other firms (the followers) choose their outputs after observing the leader’s decision. This gives the leader a first-mover advantage, as it can influence the market outcome by anticipating the followers’ reactions.

This strategic decision-making process contrasts with other oligopoly models where firms move simultaneously or are price takers.

❌ Why the other options are incorrect:

• The Cournot Model: Firms decide on quantities simultaneously, so no firm has a first-mover advantage.

• The Bertrand Model: Focuses on price competition, where firms also act simultaneously and undercut each other's prices — not about first-mover advantage.

• The Kinked Demand Curve Model: Explains price rigidity in oligopoly due to the assumption that rivals will match price cuts but not price increases. It does not involve first-mover dynamics.

✅ Final Answer: The Stackelberg Model.

✅ Correct Answer: Focus on people, planet, and profit.

✅ Explanation:
The passage explicitly defines the Triple Bottom Line Approach as focusing on “3P’s; People, Planet, and Profit”. This approach emphasizes that companies should balance their economic goals with social and environmental responsibilities, addressing the expectations of all stakeholders—not just shareholders.

❌ Why the other options are incorrect:

• Focus on customer satisfaction, revenue, and profit:
  This is a narrow business-focused view and doesn’t reflect the environmental or social dimensions mentioned in the Triple Bottom Line.

• Focus on shareholder's interest, environmental sustainability, and innovation:
  While partially aligned with CSR goals, this option does not match the 3P model stated in the passage.

• Focus on reducing costs, increasing production, and market share:
  This reflects traditional business metrics but ignores the CSR components central to the Triple Bottom Line.

✅ Final Answer: Focus on people, planet, and profit.

✅ Correct Answer: Rate of change in GNP deflator.

✅ Explanation:
The rate of change in the GNP deflator better explains inflation because the GNP deflator captures the price changes across the entire economy, including consumer goods, investment goods, government services, and net exports. It reflects overall inflation by measuring how much of the rise in GNP is due to higher prices rather than increased output. Tracking the rate of change in the GNP deflator gives a comprehensive picture of inflationary trends across the full spectrum of the economy, not just a part like consumers or wholesalers.

❌ Why the other options are incorrect:

• GNP deflator: Only gives the level of price change, not the rate of change which is needed to properly understand inflation dynamics over time.

• Wholesale Price Index (WPI): Measures price changes at the wholesale level and does not include services. It's not as comprehensive and misses retail consumer price changes.

• Consumer Price Index (CPI): Focuses only on a fixed basket of consumer goods and services, ignoring investment goods and government purchases, thus not reflecting entire economic inflation.

✅ Final Answer: Rate of change in GNP deflator.

✅ Correct Answer: The Bounded Rationality Approach

✅ Explanation:
The Bounded Rationality Approach, developed by Herbert A. Simon, suggests that decision-makers operate under constraints such as limited information, limited time, and cognitive limitations. Instead of searching for the optimal solution, they settle for a solution that is “satisfactory” or “good enough” — this is known as satisficing.

This approach reflects how decisions are often made in real-world settings, where managers cannot analyze every possible option and instead choose one that meets the minimum criteria for success under the circumstances.

❌ Why the other options are incorrect:

• The Behavioural Approach: Focuses on understanding human behavior in organizations but does not specifically emphasize satisficing or limited decision-making capacity.

• The 'Garbage Can' Approach: Describes decision-making in chaotic organizations where problems, solutions, and participants are disconnected — more random than rational or bounded.

• The Cooperative Social Systems Approach: Emphasizes teamwork, communication, and shared goals in organizational decision-making, not satisficing behaviour.

✅ Final Answer: The Bounded Rationality Approach.

✅ Correct Answer: a, b, c, and d

✅ Explanation:
Max Weber's model of an ideal bureaucracy outlines specific characteristics that define an efficient and rational organizational structure. The correct options reflect his original six principles:

• (a) Division of labor: Weber emphasized breaking jobs into clearly defined, routine tasks to increase efficiency and specialization.

• (b) Hierarchy of authority: Every position is part of a clear hierarchy where higher offices supervise lower ones.

• (c) Selection based on technical competence: Individuals are hired and promoted based on merit, qualifications, and competence—not favoritism.

• (d) Impersonality and uniform rules: Rules are applied uniformly, ensuring decisions are made without bias or influence from personal relationships.

These principles promote predictability, accountability, and efficiency in large organizations.

❌ Why (e) is incorrect:
"The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole" reflects broader management philosophy, not specifically Weber's bureaucracy. While it's consistent with the goals of efficiency and rationality, Weber did not list this as one of the formal principles of an ideal bureaucracy.

✅ Final Answer: a, b, c, and d

✅ Correct Answer: Statement I is correct but Statement II is incorrect

✅ Explanation:
Statement I is correct because in today’s competitive business environment, ethics are increasingly viewed as essential for long-term success. Ethical businesses tend to build stronger brand reputations, retain loyal customers, attract top talent, and avoid legal troubles — all of which contribute to sustainability and success.

Statement II is incorrect because an ethical organization is primarily identified by how it treats its stakeholders — including employees, customers, investors, suppliers, and communities. Ethical excellence is not just about performance metrics or corporate image; it’s grounded in transparency, fairness, and responsibility in stakeholder relationships.

❌ Why the other options are incorrect:

• Both Statement I and Statement II are correct: This is incorrect because Statement II misrepresents the foundation of ethical recognition.

• Both Statement I and Statement II are incorrect: Statement I is valid, so this is incorrect.

• Statement I is incorrect but Statement II is correct: Statement I is actually correct and Statement II is not.

✅ Final Answer: Statement I is correct but Statement II is incorrect.

✅ Correct Answer: Lower indifference curves indicate a higher level of satisfaction

✅ Explanation:

1. Indifference curves slope downward to the right:

   • This is correct. Indifference curves represent combinations of two goods that give the consumer the same level of satisfaction. As you move along an indifference curve, increasing the quantity of one good generally requires a decrease in the quantity of the other good to maintain the same level of satisfaction. Hence, indifference curves slope downward to the right.

2. Indifference curves of imperfect substitutes are convex to the origin:

   • This is correct. When goods are imperfect substitutes, the consumer is willing to give up more of one good to get an additional unit of the other good, but at a diminishing rate. This results in a convex (bowed-inward) shape of the indifference curve.

3. Indifference curves neither intersect nor are tangent to one another:

   • This is correct. Indifference curves do not intersect because each curve represents a different level of satisfaction. If they intersected, it would imply that the consumer is simultaneously indifferent between two different levels of satisfaction, which is logically inconsistent. Indifference curves also cannot be tangent to each other, as this would imply two different levels of satisfaction at a single point.

4. Lower indifference curves indicate a higher level of satisfaction:

   • This is incorrect. Higher indifference curves indicate a higher level of satisfaction, not lower ones. The farther away an indifference curve is from the origin, the higher the level of satisfaction it represents because it implies more of one or both goods.

Thus, the incorrect statement is "Lower indifference curves indicate a higher level of satisfaction."

✅ Final Answer: Lower indifference curves indicate a higher level of satisfaction.

✅ Correct answer: (2), (4)

✅ Explanation:

A price ceiling is a maximum price set by the government that is below the equilibrium price. When this happens, it causes the price of the commodity to be set lower than the market-clearing price.

• (2) Shortage of commodity:
  Since the price is lower, demand increases (because consumers want to buy more at a lower price), but supply decreases (because producers are less willing to supply at the lower price). This results in a shortage — there is not enough supply to meet the higher demand.

• (4) Black marketing:
  Because of the shortage, consumers who still want the product may be willing to pay a higher price than the controlled price. This leads to black marketing, where the product is sold illegally at prices above the ceiling price.

❌ Why the other options are incorrect:

• Commodity glut in market (1):
  A glut occurs when the price is set above the equilibrium price (i.e., a price floor), not below. A price ceiling below equilibrium results in a shortage, not a glut.

• Demand erosion (3):
  A price ceiling generally increases demand due to the lower price, so demand erosion is not an expected outcome. In fact, demand increases when prices are lowered, not eroded.

✅ Final Answer: (2), (4)

✅ Correct Answer: High elasticity for price rise but less elasticity for price cuts

✅ Explanation:
In oligopolistic markets, the kinked demand curve theory explains price rigidity due to the interdependence of a few dominant firms. Here's how it works:

• When an oligopolistic firm increases its price, rivals usually do not follow. As a result, the firm loses a large number of customers to competitors. This makes the demand for its product highly elastic for price increases.

• Conversely, if the firm cuts its price, competitors match the price cut to avoid losing market share. This leads to only a small increase in quantity demanded, meaning the demand is inelastic for price decreases.

Therefore, the firm faces high elasticity when it raises prices (as consumers switch to rivals) and low elasticity when it lowers prices (because rivals follow suit and total demand doesn't change much).

❌ Why the other options are incorrect:

• Low elasticity for price rise and more elasticity for price cuts: This incorrectly assumes consumers are not sensitive to price increases, which isn't true in oligopolistic settings.

• High elasticity for both: Unrealistic, as price cuts don’t lead to proportionate increases in demand due to competitive reactions.

• Low elasticity for both: Ignores consumer behavior and competitive dynamics.

✅ Final Answer: High elasticity for price rise but less elasticity for price cuts.

✅ Correct Answer: c, a, b, d, and e

✅ Explanation:
This sequence—cabde—represents the correct logical progression for developing an organizational structure:

• (c) Clearly define the objectives to determine the type, stability, and basic characteristics of the organization: Every organizational structure must begin with well-defined objectives. These goals determine the kind of structure that will support them effectively.

• (a) Enumerate and group the activities of the enterprise consistent with the determined objectives: Once objectives are set, the next step is identifying the specific tasks needed to achieve them. These are grouped into categories or functions.

• (b) Assign the grouped activities to personnel. Similar functions should be combined into one position: After organizing tasks into functional groups, they are allocated to specific roles or individuals. This establishes job responsibilities.

• (d) Determine the span of supervision, the types of organization, the basis of departmentation, and pattern of authority structure: With roles defined, the organization can now design its hierarchy—deciding how many people report to each supervisor, how departments are arranged, and how authority flows.

• (e) Assess the capacities and abilities of human and other resources at the disposal of the enterprise. Adapt the organization in sync with the reality:  Finally, align the organization to real-world limitations and resource availability.

This sequence ensures that structure follows strategy and resources are considered after a framework has been logically designed.

✅ Final Answer: c, a, b, d, and e

✅ Correct Answer: Frederick W. Taylor started as a clerk in Midvale but advanced to a senior supervisor in 1880.

📘 Explanation:

The passage clearly mentions, "In 1877, Frederick W. Taylor started as a clerk in Midvale but advanced to foreman in 1880." The key term is foreman, not "senior supervisor," making the statement incorrect.

❌ Scientific management is a theory of management that analyzes and synthesizes workflow. – This is true as per the passage.

❌ By the 1920s, scientific management was still influential but had entered into competition and syncretism with opposing or complementary ideas. – This is accurate, as mentioned in the passage.

❌ Taylor began his theory's development within manufacturing industries. – The passage states Taylor's work was developed within manufacturing industries, particularly steel, confirming this statement.

✅ Final Answer: Frederick W. Taylor started as a clerk in Midvale but advanced to a senior supervisor in 1880.

✅ Correct answer: Confidence in true financial performance

✅ Explanation: According to the passage, adhering to corporate governance gives investors confidence in the true financial performance of a company. It helps in improving transparency and ensures that financial reports reflect the company’s genuine performance rather than manipulated figures for short-term gains.

❌ Why the other options are incorrect:

Short-term gains: The passage highlights that corporate governance is focused on long-term financial credibility, not short-term gains. Accounting tricks may give short-term profits, but corporate governance aims for true financial performance.

Higher rates of dividend: The passage does not specifically mention dividends as a direct benefit of corporate governance. It focuses more on transparency, openness, and confidence in financial performance.

Possibilities of rights issues: The passage does not mention rights issues as a benefit of corporate governance. The focus is on the improvement of financial credibility and investor confidence.

✅ Final Answer: Confidence in true financial performance

✅ Correct Answer: (A)-(III), (B)-(IV), (C)-(II), (D)-(I)

📘 Explanation:

(A) Operational Management → (III) Henri Fayol: Henri Fayol is known for his work in management, and he is often associated with the principles of operational management.

(B) Behavioural Approach → (IV) Elton Mayo: Elton Mayo is known for his work on the human relations movement and the behavioural approach to management, particularly through the Hawthorne studies.

(C) Social Systems Approach → (II) Wilfredo Pareto: Wilfredo Pareto is known for the Social Systems Approach, where he explored the dynamics of social systems and their role in decision-making.

(D) 7-S Approach → (I) McKinsey: The 7-S Framework was developed by McKinsey & Company, which emphasizes seven key elements that need to be aligned for organizational effectiveness.

✅ Final Answer: (A)-(III), (B)-(IV), (C)-(II), (D)-(I)

✅ Correct Answer: E, B, A, C, D

✅ Explanation:
Income elasticity of demand (YED) measures how the quantity demanded of a good responds to changes in income. The goods listed can be ranked from lowest to highest based on their typical income elasticity values:

• (E) Giffen goods: These are a rare type of inferior goods where demand increases as the price increases, due to strong income effects. They generally have negative income elasticity, possibly the lowest among all goods.

• (B) Inferior goods: These goods see a decrease in demand as income rises, so they have negative income elasticity but not necessarily as extreme as Giffen goods.

• (A) Necessities: These have low positive income elasticity (between 0 and 1). As income rises, demand increases only slightly.

• (C) Normal goods: These have positive income elasticity—demand increases with income, but less than proportionally. They overlap with necessities but can have higher elasticity.

• (D) Luxury goods: These have high income elasticity (greater than 1). Demand increases more than proportionally with income, as people buy more luxuries when they earn more.

✅ Final Answer: E, B, A, C, D

✅ Correct Answer: d → e → c → b → a

📌 Explanation:

To determine the correct timeline of key management theories, we examine when each theory was introduced:

📚 Origin Timeline of Theories:

1. F.W. Taylor – Scientific Management Theory
   ➤ Early 1900s (Published "Principles of Scientific Management" in 1911)
   ➤ Focus: Time studies, standardization, efficiency.

2. Henri Fayol – Administrative Management Theory
   ➤ 1916 ("General and Industrial Management")
   ➤ Focus: Functions of management (planning, organizing, commanding, coordinating, controlling).

3. Max Weber – Bureaucracy Theory
   ➤ Developed around 1920s (posthumously recognized)
   ➤ Focus: Formal structure, hierarchy, rules, impersonality.

4. Elton Mayo – Human Relations Theory
   ➤ Based on Hawthorne Studies (1924–1932)
   ➤ Focus: Social needs, worker motivation, importance of human factors.

5. Ludwig von Bertalanffy – Systems Theory
   ➤ Developed in 1940s–1950s, formalized in 1968 with “General System Theory”
   ➤ Focus: Organizations as open systems with interdependent parts.

✅ Final Answer: d → e → c → b → a

✅ Correct Answer: a. Necessities, b. Substitutes, c. Luxury goods

✅ Explanation:

The term "positive elasticities" can refer to positive values of income elasticity of demand or cross-price elasticity of demand, depending on context. Here's how each option fits:

✔ a. Necessities

• Income Elasticity of Demand: Positive, but less than 1 (0 < YED < 1)

• Demand increases with income, but not proportionally.
  ✅ Has positive elasticity.

✔ b. Substitutes

• Cross-Price Elasticity of Demand: Positive

• When the price of one good rises, demand for its substitute rises.
  ✅ Has positive elasticity.

✔ c. Luxury Goods

• Income Elasticity of Demand: Positive and greater than 1 (YED > 1)

• Demand increases more than proportionally with income.
  ✅ Has positive elasticity.

❌ d. Complementary Goods

• Cross-Price Elasticity of Demand: Negative

• Price increase of one leads to demand decrease of the other.
  ❌ Does NOT have positive elasticity.

❌ e. Inferior Goods

• Income Elasticity of Demand: Negative

• As income rises, demand falls.
  ❌ Does NOT have positive elasticity.

✅ Final Answer: a. Necessities, b. Substitutes, c. Luxury goods

✅ Correct Answer: Unity of direction

✅ Explanation:
The Unity of Direction principle, proposed by Henri Fayol, states that activities with the same objective should be organized under one plan and one head. This ensures coordinated effort and avoids duplication or conflict. It is key for aligning departmental efforts toward organizational goals.

This principle is especially important in large organizations where multiple teams or departments may be working toward similar ends — Unity of Direction ensures their efforts are unified and harmonized.

❌ Why the other options are incorrect:

• Unity of command:
  Refers to each employee reporting to only one superior, to avoid confusion and conflicting instructions — different from managing group activities.

• Division of work:
  Focuses on specialization and dividing tasks among individuals to increase efficiency, not on aligning goals or planning.

• Centralization:
  Concerns the degree to which decision-making is concentrated at a single point in the organization, not about unity of plans or objectives.

✅ Final Answer: Unity of direction.

✅ Correct Answer: The desire of a commodity backed by ability and willingness to pay is demand

✅ Explanation:
The definition of demand in economics is not just the desire for a commodity but also the ability and willingness to pay for it. This means that demand is the desire for a good or service coupled with the financial ability to purchase it. Without the ability to pay, the desire alone does not constitute demand.

❌ Why the other options are incorrect:

• Decrease in input prices causes a leftward shift in the supply curve: This statement is incorrect. A decrease in input prices actually causes the supply curve to shift rightward, not leftward, as producers can supply more at each price level.

• Demand for car and price of petrol are inversely related: This is often true in the short run, but it isn't always universally applicable to all consumers or situations. While rising petrol prices can reduce the demand for cars (especially gas-guzzling models), the relationship might not be strictly inverse in every case, as some might prioritize convenience or find alternatives like electric cars.

• Most demand functions are of the form, D = a + bP: This is incorrect. The correct form of a linear demand function is typically D = a - bP, where D is demand, P is price, a is a constant, and b represents the slope, which is usually negative because as price increases, demand tends to decrease.

✅ Final Answer: The desire of a commodity backed by ability and willingness to pay is demand.

✅ Correct Answer: Gross National Product (GNP) > Gross National Income (GNI)

✅ Explanation:
This statement is NOT correct because Gross National Product (GNP) and Gross National Income (GNI) are generally considered equivalent or very close in value, differing only in minor statistical treatment or terminology used by different organizations (e.g., IMF or World Bank).

• GNP and GNI both measure the total income earned by a country's residents and businesses, including income from abroad.

• In modern usage, GNI has largely replaced GNP in official economic statistics, and they are typically equal or nearly equal, not that GNP is greater than GNI.

✅ Why the other options are not suitable:

• GDP = GNP less Net Income from Abroad: ✔️ Correct
  Rearranged, GNP = GDP + Net Income from Abroad, which is standard.

• NNP = GNP less Depreciation: ✔️ Correct
  Net National Product accounts for depreciation (capital consumption) by subtracting it from GNP.

• NDP = NNP less Net Income from Abroad: ✔️ Correct
  Since NNP = NDP + Net Income from Abroad, this rearrangement is valid.

✅ Final Answer: Gross National Product (GNP) > Gross National Income (GNI) (This is not correct)

Correct Answer : ❌ J. K. Galbraith

✅ Explanation:

J. K. Galbraith is not directly related to oligopoly models. He was more focused on institutional economics, market power, and the role of large corporations in shaping consumer behavior and economic policy, rather than formulating specific oligopoly market models.

❌ Why the other options are incorrect (i.e., they are related to oligopoly):

Paul M. Sweezy: Known for the kinked demand curve model, which explains price rigidity in oligopoly markets.

Augustin Cournot: Developed the Cournot model, one of the earliest and most foundational oligopoly models, where firms choose quantities independently.

Hall and Hitch: Proposed the “average-cost pricing” model, based on surveys of real firms, often discussed in the context of oligopolistic behavior.

✅ Final Answer: J. K. Galbraith

✅ Correct Answer: Taylorism

📘 Explanation:

• Taylorism: ✅ True – Known as Scientific Management, developed by Frederick Taylor to improve efficiency and labor productivity through scientific analysis.

Why the other options are incorrect:

• Managerial Rationalism: ❌ False – Broader theory focusing on logical decision-making, not specifically on labor efficiency like Taylorism.

• Fayolism: ❌ False – Henri Fayol’s principles on general management, not focused on labor productivity.

• Functional Organization: ❌ False – Focuses on organizational structure, not labor efficiency or work analysis like Taylorism.

✅ Final Answer: Taylorism

✅ Correct Answer: Both Assertion "A" and Reason "R" are correct, and Reason "R" is the correct explanation for Assertion "A"

✅ Explanation:

• Assertion "A": Corporate governance is an important instrument of investor protection.
  This is correct because corporate governance ensures transparency, accountability, and fairness in the operations of a company. It protects the interests of investors by ensuring that companies are managed in a way that prioritizes the well-being of shareholders and stakeholders.

• Reason "R": Strong corporate governance is indispensable to resilient and vibrant capital markets.
  This is also correct. A well-governed company fosters investor confidence and ensures that markets function efficiently, thereby contributing to the stability and growth of capital markets. Strong governance minimizes risks such as fraud, mismanagement, and corruption, which can damage market integrity.

Reason "R" directly supports Assertion "A" by explaining that effective governance leads to a healthier capital market, which, in turn, protects investors.

✅ Final Answer: Both Assertion "A" and Reason "R" are correct, and Reason "R" is the correct explanation for Assertion "A".

✅ Correct Answer: The difference between what consumers are willing to pay for a given quantity of goods and services and the amount they actually pay.

✅ Explanation:
Consumer surplus is an economic concept that measures the benefit or extra value consumers receive when they pay a price lower than what they are willing to pay for a good or service. It represents the difference between the total amount consumers are prepared to pay and the actual amount they end up paying in the market. This surplus indicates the extra satisfaction or utility consumers gain from market transactions.

It is a key concept in welfare economics and is used to assess consumer benefits and the efficiency of markets.

❌ Why the other options are incorrect:

• The difference between what consumers are willing to buy and the quantity they actually buy: This refers more to unmet demand or demand forecasting errors, not surplus.

• The difference between what consumers are willing to plan to buy and the quality they actually buy: This relates to decision-making or consumer expectations versus reality, not economic surplus.

• The difference between total utility and addition to total utility from goods and services: This mixes up utility concepts. It doesn't define consumer surplus but rather refers to marginal utility.

✅ Final Answer: The difference between what consumers are willing to pay for a given quantity of goods and services and the amount they actually pay.

✅ Correct Answer: Normal goods

✅ Explanation:
Normal goods are those for which demand increases as consumer income rises, but the rate of increase in demand slows down as income continues to grow. Initially, as income increases, people buy more of these goods, but after a certain point, the demand growth diminishes because consumers have already satisfied their basic needs for these goods.

Why the other options are incorrect:

• Inferior goods: Demand for inferior goods decreases as income increases, not the other way around.

• Essential consumer goods: While demand for these goods may increase with income, it generally doesn't slow down, and they are often considered necessities, which continue to be in demand even as income grows.

• Luxury and prestige goods: These goods often see a rapid increase in demand as income rises and typically do not slow down as much as normal goods. Instead, their demand may continue to increase as income continues to rise.

✅ Final Answer: Normal goods.

✅ Correct answer: Both (A) and (R) are correct and (R) is the correct explanation of (A).

✅ Explanation:

• Assertion (A) is correct because the passage mentions that companies are indeed required to spend 2% of their profits towards CSR, and this has to be done within a specified time limit as per the new amendments to the CSR guidelines.

• Reason (R) is also correct because the passage describes that the Indian Government has implemented stringent provisions for CSR, including the mandatory 2% spending and the requirement for companies to either comply or transfer the amount to government-run funds.

Since both statements are true, and the reasoning explains why the companies must spend the 2% profit, (R) serves as the correct explanation for (A).

✅ Final Answer: Both (A) and (R) are correct and (R) is the correct explanation of (A).

✅ Correct Answer: It provides a competitive edge in the crowded marketplace.

✅ Explanation:
The passage clearly states, “Their sense of social responsibility provides them with a competitive edge over their competitors in a crowded marketplace.” This highlights that in the modern digitalized world, CSR helps companies stand out and strengthens their brand value by aligning business with social and environmental goals — not just product quality.

❌ Why the other options are incorrect:

• It has no impact on the company’s brand:
  Incorrect — the passage emphasizes that a company’s brand is shaped by its social responsibility and overall impact on society.

• It depends solely on the quality of products:
  The passage specifically refutes this by saying a company’s brand is not just dependent on product quality.

• It leads to higher profits:
  While CSR may contribute indirectly to profitability through brand trust, the passage does not make a direct link between CSR and higher profits.

✅ Final Answer: It provides a competitive edge in the crowded marketplace.

✅ Correct Answer: G. Myrdal and P. Streeten

✅ Explanation:
The Structuralist Theory of Inflation was developed primarily by economists like Gunnar Myrdal and Paul Streeten, who argued that inflation in developing countries stems from structural rigidities—such as supply bottlenecks, sectoral imbalances, and institutional constraints. This theory emphasizes that inflation is not merely a result of excess money supply, but rather the outcome of deeper economic and social issues that restrict supply responsiveness and limit policy flexibility.

❌ Why the other options are incorrect:

• V.N. Pandit: An Indian economist known for his work on macroeconomic policy, but not associated with the formulation of structuralist inflation theory.

• Milton Friedman: A leading proponent of the monetarist theory of inflation, which attributes inflation primarily to excessive growth in the money supply.

• Fritz Machlup: Known for contributions to knowledge economics and international trade, not for structuralist inflation theory.

• Keynes: Developed Keynesian economics, which emphasizes demand-side factors and underemployment equilibrium but did not focus on structural causes of inflation in developing economies.

✅ Final Answer: G. Myrdal and P. Streeten.

✅ Correct Answer: (B), (D), (C), (A)

🧠 Explanation:

As per Koontz and Weihrich, the requirements for effective control in reverse order (from later to initial) are:

• (B) Fitting the control system to the organisational culture – This comes last, as once the control system is in place, it should resonate with the organization's values and culture.

• (D) Seeking objectivity of controls – Ensures the control process is based on measurable and verifiable data.

• (C) Making sure that control points up exceptions at critical point – Focuses the control system on what matters most.

• (A) Tailoring controls to individual managers – This is the initial step where controls are designed keeping in mind the responsibilities and authority of managers.

✅ Final Sequence (from later to initial): (B) → (D) → (C) → (A)