# CAT 2000 LRDI

Paper year paper questions for CAT 2000 LRDI

**1. CAT 2000 LRDI | LR - Arrangements**

Persons X, Y, Z and Q live in red, green, yellow or blue coloured houses placed in a sequence on a street. Z lives in a yellow house. The green house is adjacent to the blue house. X does not live adjacent to Z. The yellow house is in between the green and red houses. The colour of the house X lives in is

- A.
blue

- B.
green

- C.
red

- D.
not possible to determine

Answer: Option A

**Explanation** :

The yellow house is between the red and the green house. Also, the green house is adjacent to the blue house.

∴ There are two possible arrangements of the houses.

Z lives in the yellow house. X does not live adjacent to Z. In both the cases, X cannot live in either the red or the green house.

∴ X lives in the blue house.

Hence, option 1.

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**2. CAT 2000 LRDI | LR - Mathematical Reasoning**

My bag can carry no more than ten books. I must carry at least one book each of management, mathematics, physics and fiction. Also, for every management book I carry I must carry two or more fiction books, and for every mathematics book I carry I must carry two or more physics books. I earn 4, 3, 2 and 1 points for each management, mathematics, physics and fiction book, respectively, I carry in my bag. I want to maximise the points I can earn by carrying the most appropriate combination of books in my bag. The maximum points that I can earn are

- A.
20

- B.
21

- C.
22

- D.
23

Answer: Option C

**Explanation** :

Points earned by carrying 1 management and 2 fiction books = 4 + 1 + 1 = 6

Points earned by carrying 1 mathematics and 2 physics books = 3 + 2 + 2 = 7

Taking these two combinations together, I am earning a total of 13 points and carrying at least one book of each category making a total of 6 books.

To maximise points, I should carry four more books which will include 1mathematics and 3 physics book.

∴ Total points earned = 13 + 3 + (2 × 3) = 22

Hence, option 3.

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**3. CAT 2000 LRDI | LR - Selection & Distribution**

Five persons with names P, M, U, T and X live separately in any one of the following a palace, a hut, a fort, a house or a hotel. Each one likes two different colours from among the following blue, black, red, yellow and green. U likes red and blue. T likes black. The person living in a palace does not like black or blue. P likes blue and red. M likes yellow. X lives in a hotel. M lives in a

- A.
hut

- B.
palace

- C.
fort

- D.
house

Answer: Option B

**Explanation** :

The information can be organized in a tabular form as shown below.

∵ The person living in a palace does not like black or blue implies that person cannot be U, T or P.

∴ The person who lives in a palace will be either M or X. But X lives in a hotel.

∴ M must live in a palace.

Hence, option 2.

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**4. CAT 2000 LRDI | LR - Selection & Distribution**

There are ten animals-two each of lion, panther, bison, bear, and deer in a zoo. The enclosures in the zoo are named X, Y, Z, P and Q and each enclosure is allotted to one of the following attendants Jack, Mohan, Shalini, Suman and Rita. Two animals of different species are housed in each enclosure. A lion and a deer cannot be together. A panther cannot be with either a deer or a bison. Suman attends to animals from among bison, deer, bear and panther only. Mohan attends to a lion and a panther. Jack does not attend to deer, lion or bison. X, Y and Z are allotted to Mohan, Jack and Rita respectively. X and Q enclosures have one animal of the same species. Z and P have the same pair of animals. The animals attended by Shalini are

- A.
bear & bison

- B.
bison & deer

- C.
bear & lion

- D.
bear & panther

Answer: Option C

**Explanation** :

The information can be organized in a tabular form as shown below.

∵ X and Q has one animal common. The only possibility is a lion.

∴ Suman doesn’t attend to lion.

∴ Q is assigned to Shalini and P is assigned to Suman.

∵ Rita and Suman attends to the same pair of animals.

∴ Rita and Suman attends to a deer and a bison.

∴ Shalini attends a lion and a bear.

Hence, option 3.

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**5. CAT 2000 LRDI | LR - Mathematical Reasoning**

Eighty kilograms (kg) of store material is to be transported to a location 10 km away. Any number of couriers can be used to transport the material can be packed in any number of units of 10, 20 or 40 kg. Courier charges are Rs. 10 per hour. Couriers travel at the speed of 10 km/hr if they are not carrying any load, at 5 km/hr if carrying 10 kg, at 2 km/hr if carrying 20 kg and at 1 km/hr if carrying 40 kg. A courier cannot carry more than 40 kg of load. The minimum cost at which 80 kg of store material can be transported will be

- A.
Rs. 180

- B.
Rs. 160

- C.
Rs. 140

- D.
Rs. 120

Answer: Option B

**Explanation** :

The table below shows the cost for various combinations.

∴ The minimum cost is Rs. 160 when 8 packets of 10 kg each are couriered.

Hence, option 2.

Workspace:

**Answer the following question based on the information given below.**

Information Technology Industry in India (Figure are in million US dollars)

**6. CAT 2000 LRDI | DI - Tables & Graphs**

The total annual exports lay between 35 and 40 percent of the total annual business of the IT industry, in years

- A.
1997-98 and 1994-95

- B.
1996-97 and 1997-98

- C.
1996-97 and 1998-99

- D.
1996-97 and 1994-95

Answer: Option B

**Explanation** :

Let’s check for the year 1994-95 as it appears in options 1 and 4.

Percentage export for 1994-95 = $\frac{485+177+6}{2041}\times 100=32.72\%$

∵ This is less than 35%, options 1 and 4 can be eliminated.

∴ The correct answer will be either option 2 or 3.

∴ Check for either one of 1997-98 or 1998-99.

Percentage export for 1998-99 = $\frac{2650+4+18}{6052}\times 100=44.15\%$

∵ This is more than 40%.

∴ Option 3 can also be eliminated.

∴ Hence, option 2.

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**7. CAT 2000 LRDI | DI - Tables & Graphs**

The highest percentage growth in the total IT business, relative to the previous year was achieved in

- A.
1995-96

- B.
1996-97

- C.
1997-98

- D.
1998-99

Answer: Option A

**Explanation** :

Percentage growth for the given years is as follows.

1995 - 96 = $\frac{2886-2041}{2041}=\frac{845}{2041}\approx 40\%$

1996 - 97 = $\frac{3807-2886}{2886}=\frac{921}{2886}\approx 30\%$

1997 - 98 = $\frac{5031-3807}{3807}=\frac{1224}{3807}\approx 31-32\%$

1998 - 99 = $\frac{6052-5031}{5031}=\frac{1021}{5031}\approx 20\%$

∴ Growth in 1995-96 is the highest.

Hence, option 1.

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**8. CAT 2000 LRDI | DI - Tables & Graphs**

Which one of the following statements is correct?

- A.
The annual software exports steadily increased but annual hardware exports steadily declined during 1994-1999.

- B.
The annual peripheral exports steadily increased during 1994-1999.

- C.
The total IT business in training during 1994-1999 was higher than the total IT business in maintenance during the same period.

- D.
None of the above statements is true.

Answer: Option C

**Explanation** :

Option 1 is false as there is no steady decline in annual hardware exports.

Option 2 is false as annual peripheral exports increase but then it declined in 1998-99.

For option3

Total IT business in training during 1994-99

= 107 + 143 + 185 + 263 + 302

= 1000 million dollars

Total IT business in maintenance during 1994-99

= 142 + 172 + 182 + 221 + 236

= 953 million dollar

∴ Total IT business in training during 1994-99 is higher than the total IT business in maintenance during the same period.

Hence, option 3.

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**9. CAT 2000 LRDI | DI - Tables & Graphs**

For the IT hardware business activity, which one of the following is not true?

- A.
1997-98 dominates 1996-97

- B.
1997-98 dominates 1995-96

- C.
1995-96 dominates 1998-99

- D.
1998-99 dominates 1996-97

Answer: Option D

**Explanation** :

IT Hardware business activity = Hardware Imports + Hardware Exports

In 1995-96 = 1037 + 35 = 1072

In 1996-97 = 1050 + 286 = 1336

In 1997-98 = 1205 + 201 = 1406

In 1998-99 = 1026 + 4 = 1030

∴ Hardware activity in 1998-99 < 1996-97.

∴ Option 4 is false.

Hence, option 4.

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**10. CAT 2000 LRDI | DI - Tables & Graphs**

For the two IT business activities, hardware and peripherals, which one of the following is true?

- A.
1996-97 dominates 1995-96

- B.
1998-99 dominates 1995-96

- C.
1997-98 dominates 1998-99

- D.
None of these

Answer: Option D

**Explanation** :

IT Hardware business activity = Hardware imports + Hardware exports

IT Peripheral business activity = Peripheral imports + Peripheral exports

Options 1, 2 and 3 are incorrect because in all of them, either hardware activity or peripheral activity is less in a year as compared to another year.

Hence, option 4.

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**Answer the following question based on the information given below.**

Factory Sector by Type of Ownership.

All figures in the table are in percent of the total for the corresponding column.

**11. CAT 2000 LRDI | DI - Tables & Graphs**

Suppose the average employment level is 60 per factory. The average employment in “wholly private” factories is approximately

- A.
43

- B.
47

- C.
50

- D.
54

Answer: Option A

**Explanation** :

Let the number of factories be 100.

∴ Total number of employees = 60 × 100 = 6000

Total number of wholly private factories = 90.3

For wholly private factories the employments is = 6000 × $\frac{64.6}{100}$= 3876

∴ Average employment = $\frac{3876}{90.3}=42.9\approx 43$

Hence, option 1.

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**12. CAT 2000 LRDI | DI - Tables & Graphs**

Among the firms in different sectors, value added per employee is highest in

- A.
Central government

- B.
Central and State/local governments

- C.
Joint sector

- D.
Wholly private

Answer: Option B

**Explanation** :

Value added per employee

$=\frac{\%Valueadded}{\%Employment}$ ...(as the multiplying factor will be common)

Option 1, Central Govt. $=\frac{14.1}{10.5}=1.342$

Option 2, Central and State/Local Govt. $=\frac{1.8}{1.0}=1.8$

Option 3, Joint Sector $=\frac{8.1}{5.1}=1.588$

Option 4, Wholly Private $=\frac{58.7}{64.6}=0.908$

Hence, option 2.

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**13. CAT 2000 LRDI | DI - Tables & Graphs**

Capital productivity is defined as the gross output value per rupee of fixed capital. The three sectors with the higher capital productivity, arranged in descending order are

- A.
Joint, wholly private, central and state/local

- B.
Wholly private, joint, central and state/local

- C.
Wholly private, central and state/local, joint

- D.
Joint, wholly private, central

Answer: Option B

**Explanation** :

Capital Productivity $=\frac{GrossO/PValue(perRupee)}{FixedCapital(perRupee)}$

Wholly Private = $\frac{63.8}{46.8}=1.363$

Joint $=\frac{8.4}{6.8}=1.235$

Central and State/Local $=\frac{1.5}{1.4}=1.071$

Central Govt. $=\frac{12.7}{17.5}=0.725$

∴ Wholly private > Joint > Central and state/local > Central govt.

Hence, option 2.

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**14. CAT 2000 LRDI | DI - Tables & Graphs**

A sector is considered “pareto efficient” if its value added per employee and its value added per rupee of fixed capital is higher than those of all other sectors. Based on the table data, the pareto efficient sector is

- A.
Wholly private

- B.
Joint

- C.
Central and state/local

- D.
Others

Answer: Option C

**Explanation** :

Value added per employee from the solution to the second question of the set, is highest for the Central and State/Local governments.

∴ That has to be the answer. No need to look for value added per rupee of fixed cost.

Hence, option 3.

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**15. CAT 2000 LRDI | DI - Tables & Graphs**

The total value added in all sectors is estimated at Rs. 140,000 crores. Suppose that the number of firms in the joint sector is 2700. The average value added per factory, in Rs. crores, in the central government is

- A.
141

- B.
14.1

- C.
131

- D.
13.1

Answer: Option D

**Explanation** :

Number of firms in joint sector (1.8%) = 2700

∴ Number of Central govt. factories = $\frac{1\times 2700}{1.8}=1500$

Total value added for the central government

= 14.1% of 140000

= 19740

∴ Average value added per factory = $\frac{19740}{1500}=13.1$

Hence, option 4.

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FEI for a country in a year, is the ratio (expressed as a percentage) of its foreign equity inflows to its GDP. The following figure displays the FEIs for select Asian countries for the years 1997 and 1998.

**16. CAT 2000 LRDI | DI - Tables & Graphs**

The country with the largest change in FEI in 1998 relative to its FEI in 1997, is

- A.
India

- B.
China

- C.
Malaysia

- D.
Thailand

Answer: Option A

**Explanation** :

Change in FEI for India = $\frac{1.71-0.72}{1.71}\times 100=57.56\%$

Change in FEI for China = $\frac{5.96-4.8}{5.96}\times 100=19.46\%$

Change in FEI for Thailand = $\frac{5.82-5.09}{5.09}\times 100=14.3\%$

Hence, option 1.

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**17. CAT 2000 LRDI | DI - Tables & Graphs**

Based on the data provided, it can be concluded that

- A.
absolute value of foreign equity inflows in 1998 was higher than that in 1997 for both Thailand and South Korea.

- B.
absolute value of foreign equity inflows was higher in 1998 for Thailand and lower for China than the corresponding values in 1997.

- C.
absolute value of foreign equity inflows was lower in 1998 for both India and China than the corresponding value in 1997.

- D.
none of the above can be inferred.

Answer: Option D

**Explanation** :

The values in the graph are all expressed as a percentage of FEI based on the GDP inflows. Absolute values for GDPs are not given.

∴ Nothing can be inferred.

Hence, option 4.

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**18. CAT 2000 LRDI | DI - Tables & Graphs**

It is known that China’s GDP in 1998 was 7% higher than its value in 1997, while India's GDP grew by 2% during the same period. The GDP of South Korea, on the other hand, fell by 5%. Which of the following statements is/are true?

- Foreign equity inflows to China were higher in 1998 than in 1997.
- Foreign equity inflows to China were lower in 1998 than in 1997.
- Foreign equity inflows to India were higher in 1998 than in 1997.
- Foreign equity inflows to South Korea decreased in 1998 relative to 1997.
- Foreign equity inflows to South Korea increased in 1998 relative to 1997.

- A.
I, III & IV

- B.
II, III & IV

- C.
I, III & V

- D.
II & V

Answer: Option D

**Explanation** :

Let us assume that the GDP of India, China and South Korea in 1997 is 100.

∴ From the table above we can figure out that only statement II and V are true.

Hence, option 4.

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**19. CAT 2000 LRDI | DI - Tables & Graphs**

China’s foreign equity inflows in 1998 were 10 times that into India. It can be concluded that

- A.
China’s GDP in 1998 was 40% higher than that of India.

- B.
China’s GDP in 1998 was 70% higher than that of India.

- C.
China’s GDP in 1998 was 50% higher than that of India.

- D.
No inference can be drawn about relative magnitudes of China’s and India’s GDPs.

Answer: Option C

**Explanation** :

Let x be the Foreign Equity inflow of India.

∴ China’s Foreign Equity inflow is 10x.

∵ FEI in India in 1998 = 0.72

$\therefore 0.72=\frac{x}{GDPofIndia}$

∴ GDP of India = $\frac{x}{0.72}$

FEI in China in 1998 was 4.8.

∴ 4.8 = $\frac{10x}{GDPofChina}$

∴ GDP of China = $\frac{10x}{4.8}$

$\therefore \frac{GDPofChina}{GDPofIndia}=\frac{\left({\displaystyle \frac{10x}{4.8}}\right)}{\left({\displaystyle \frac{x}{0.72}}\right)}$

$\therefore \frac{GDPofChina}{GDPofIndia}=1.5$

∴ China's GDP is 50% higher than that of India.

Hence, option 3.

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**Answer the following question based on the information given below.**

The table shows trends in external transactions of Indian corporate sector during the period 1993-94 to 1997-98. In addition, following definitions hold good.

Sales_{i} , Imports_{i}, and Exports_{i} respectively denote the sales, imports and exports in year i.

Deficit in year i, Deficit_{i} = Imports_{i} – Exports_{i}.

Deficit Intensity in year i, DI_{i} = Deficit_{i} / Sales_{i}.

Growth rate of deficit intensity in year i, GDIi = (DI_{i} – DI_{i-1})/DI_{i-1}

Further, note that all imports are classified as either raw material or capital goods.

Trends in External Transactions of Indian Corporate Sector (All figures in %)

**20. CAT 2000 LRDI | DI - Tables & Graphs**

The highest growth rate in deficit intensity was recorded in

- A.
1994-95

- B.
1995-96

- C.
1996-97

- D.
1997-98

Answer: Option A

**Explanation** :

Deficit intensity = $\frac{Deficit}{Sales}=\frac{Import}{Sales}-\frac{Export}{Sales}=$ Import Intensity - Export Intensity

Growth rate in 1994-95 = $\frac{6.3-5.1}{5.1}$×100 = 23.5%

Growth rate in 1995-96 = $\frac{7.6-6.3}{6.3}$ × 100 = 20.63%

Growth rate in 1996-97 = $\frac{8-7.6}{7.6}$ × 100 = 5.26%

Growth rate in 1997-98 = $\frac{5-8}{8}$ × 100 = -37.5%

Hence, option 1.

Workspace:

**21. CAT 2000 LRDI | DI - Tables & Graphs**

The value of the highest growth rate in deficit intensity is approximately

- A.
8.45%

- B.
2.15%

- C.
33.3%

- D.
23.5%

Answer: Option D

**Explanation** :

Deficit Intensity = $\frac{Deficit}{Sales}=\frac{Import}{Sales}-\frac{Export}{Sales}=$ Import Intensity - Export Intensity

Growth rate in 1994-95 = $\frac{6.3-5.1}{5.1}$×100 = 23.5%

Growth rate in 1995-96 = $\frac{7.6-6.3}{6.3}$ × 100 = 20.63%

Growth rate in 1996-97 = $\frac{8-7.6}{7.6}$ × 100 = 5.26%

Growth rate in 1997-98 = $\frac{5-8}{8}$ × 100 = -37.5%

the highest growth rate in deficit intensity = 23.5%

Hence, option 1.

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**22. CAT 2000 LRDI | DI - Tables & Graphs**

In 1997-98 the total cost of raw materials is estimated as 50% of sales of that year. The turn over of Gross fixed assets, defined as the ratio of sales to Gross fixed assets, in 1997-98 is, approximately

- A.
3.3

- B.
4.3

- C.
0.33

- D.
not possible to determine

Answer: Option B

**Explanation** :

Total cost of raw material = 0.5 × Sales

∵ Import of raw material = 20.2 × Total cost of raw material

∴ Import of raw material = 10.1 × Sales

∵ Import of Capital Goods = 17.6 × Gross fixed assets (GFA)

∵ Imports = Raw Materials + Capital Goods

∴ Imports = (10.1 × Sales) + (17.6 × GFA)

∵ Imports = 14.2 × Sales

∴ 14.2 × Sales = (10.1 × Sales) + (17.6 × GFA)

$\therefore \frac{Sales}{GFA}=\frac{17.6}{4.1}=4.3$

Hence, option 2.

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**23. CAT 2000 LRDI | DI - Tables & Graphs**

Which of the following statements can be inferred to be true from the given data?

- A.
During the 5 year period between 1993-94 and 1997-98, exports have increased every year.

- B.
During the 5 year period between 1993-94 and 1997-98, imports have decreased every year.

- C.
Deficit in 1997-98 was lower than that in 1993-94.

- D.
Deficit intensity has increased every year between 1993-94 and 1996-97.

Answer: Option D

**Explanation** :

Deficit intensity = $\frac{Deficit}{Sales}=\frac{Import}{Sales}-\frac{Export}{Sales}$= Import Intensity - Export Intensity

Growth rate in 1994-95 = $\frac{6.3-5.1}{5.1}$×100 = 23.5%

Growth rate in 1995-96 = $\frac{7.6-6.3}{6.3}$×100 = 20.63%

Growth rate in 1996-97 = $\frac{8-7.6}{7.6}$ × 100 = 5.26%

Growth rate in 1997-98 = $\frac{5-8}{8}$ ×100 = -37.5%

we can conclude that deficit intensity is increasing between 1993-94 and 1996-97.

Hence, option 1.

Workspace:

**Answer the following question based on the information given below.**

The figures below present annual growth rate, expressed as the % change relative to the previous year, in four sectors of the economy of the Republic of Reposia during the 9 year period from 1990 to 1998. Assume that the index of production for each of the four sectors is set at 100 in 1989. Further, the four sectors manufacturing, mining and quarrying, electricity, and chemicals, respectively, constituted 20%. 15%. 10% and 15% of total industrial production in 1989.

**24. CAT 2000 LRDI | DI - Tables & Graphs**

Which is the sector with the highest growth during the period 1989 and 1998?

- A.
Manufacturing

- B.
Mining and quarrying

- C.
Electricity

- D.
Chemicals

Answer: Option C

**Explanation** :

In the graph of electricity there is no negative growth registered even in a single year and there is a good constant growth in all the years.

Actual calculations will take a very long time.

For theoretical purposes, electricity growth would be [100 (1.08)(1.085)(1.05) ... (1.06)] − 100.

Hence, option 3.

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**25. CAT 2000 LRDI | DI - Tables & Graphs**

The overall growth rate in 1991 of the four sectors together is approximately

- A.
10%

- B.
1%

- C.
2.5%

- D.
1.5%

Answer: Option D

**Explanation** :

In 1989, the production of the Manufacturing, Mining and Quarrying, Electricity and Chemical sectors is in the ratio 20 : 15 : 10 : 15

Let the productions of these sectors in 1989 be 20x, 15x, 10x and 15x respectively.

The productions of these sectors in 1990 and 1991 are as in the following table:

∴ Growth Rate in 1991 in the four sectors is = $\frac{65.33x-64.26x}{64.26x}\times 100$

= 1.67%

The closest option is 1.5%

Hence, option 4.

Workspace:

**26. CAT 2000 LRDI | DI - Tables & Graphs**

When was the highest level of production in the manufacturing sector achieved during the nine year period 1990-1998?

- A.
1998

- B.
1995

- C.
1990

- D.
Cannot be determined

Answer: Option A

**Explanation** :

As the production is continuously increasing except for one year, the highest production has to be in the year 1998.

Hence, option 1.

Workspace:

**27. CAT 2000 LRDI | DI - Tables & Graphs**

When was the lowest level of production of the mining and quarrying sector achieved during the nine year period 1990-1998?

- A.
1996

- B.
1993

- C.
1990

- D.
Cannot be determined

Answer: Option B

**Explanation** :

From the graph we can observe that the growth in the mining and quarrying sector becomes negative in the year 1993 for the first time.

∴ Production in 1993 = 1.04 × 1.01 × 1.01 × 0.97 ≈ 1.03 times

This is lower than the value in 1990.

Hence, option 2.

Workspace:

**28. CAT 2000 LRDI | DI - Tables & Graphs**

The percentage increase of production in the four sectors, namely, manufacturing, mining & quarrying, electricity and chemicals, taken together, in 1994, relative to 1989, is approximately

- A.
25

- B.
20

- C.
50

- D.
40

Answer: Option A

**Explanation** :

Let the base is 100 in 1989.

∴ Cumulative contribution of the four sectors in 1989 = 20 + 15 + 10 + 15 = 60

In 1994, the four sectors are

Manufacturing = 100 + 9 − 1 + 3 + 6 + 9 = 126

Mining and quarrying = 100 + 4 + 1 + 1 − 3 + 6 = 109

Chemicals = 100 + 8 + 1 + 2 + 6 + 8 = 125

Electricity = 100 + 8.5 + 9 + 5 + 7.5 + 9 = 139

Note: The actual values are slightly more than what we have calculated above as the growth is multiplied not added. But we can get a closer answer by adding also because the option values are not so close.

Multiplying with the respective weights, we get,

Cumulative weight = (126 × 0.2) + (109 × 0.15) + (139 × 0.10) + (125 × 0.15) = 74.2

∴ Oercentage increase = $\frac{74.2-60}{60}$ × 100 ≈ 24%

Hence, option 1.

Workspace:

**29. CAT 2000 LRDI | DI - Tables & Graphs**

It is known that the index of total industrial production in 1994 was 50 percent more that in 1989. Then, the percentage increase in production between 1989 and 1994 in sectors other than the four listed above is

- A.
57.5

- B.
89.5

- C.
127.5

- D.
47.5

Answer: Option B

**Explanation** :

If total industrial production in 1989 is 100, then in 1994 it is 150.

From the previous question,

Contribution of 4 sectors in 1989 = 60

Contribution of 4 sectors in 1994 = 74.2

∴ Contribution from other sectors in 1989 = 100 – 60 = 40

∴ Contribution from other sectors in 1994 = 150 – 74.2 = 75.8

∴ Percentage increase = $\frac{75.8-40}{40}$ × 100 = 89.5%

Hence, option 2.

Workspace:

**Answer the following question based on the information given below.**

ABC Ltd. produces widgets for which the demand is unlimited and they can sell all of their production. The graph below describes the monthly variable costs incurred by the company as a function of the quantity produced. In addition, operating the plant for one shift results in a fixed monthly cost of Rs. 800. Fixed monthly costs for second shift operation are estimated at Rs. 1200. Each shift operation provides capacity for producing 30 widgets per month.

Note : Average unit cost, AC = Total monthly costs/monthly production, and

Marginal cost, MC is the rate of change in total cost for unit change in quantity produced.

**30. CAT 2000 LRDI | DI - Tables & Graphs**

Total production in July is 40 units. What is the approximate average unit cost for July?

- A.
3600

- B.
90

- C.
140

- D.
115

Answer: Option C

**Explanation** :

Total monthly costs = Fixed Cost + Variable Cost

∴ Total monthly cost for the month of July = (800 + 1200) + 3600 = Rs. 5600

∴ Average unit cost = $\frac{5600}{40}$= Rs. 140

Hence, option 3.

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**31. CAT 2000 LRDI | DI - Tables & Graphs**

ABC Ltd. is considering increasing the production level. What is the approximate marginal cost of increasing production from its July level of 40 units?

- A.
110

- B.
130

- C.
240

- D.
160

Answer: Option B

**Explanation** :

Total cost for 41 units = 800 + 1200 + 3700 = 5700

Total cost for 51 units = 800 + 1200 + 5000 = 7000

∴ Total cost for 10 units = 7000 − 5700 = 1300

∴ Cost per unit = Marginal Cost = Rs. 130

Hence, option 2.

Workspace:

**32. CAT 2000 LRDI | DI - Tables & Graphs**

From the data provided it can be inferred that, for production levels in the range of 0 to 60 units.

- A.
MC is an increasing function of production quantity.

- B.
MC is a decreasing function of production quantity.

- C.
Initially MC is a decreasing function of production quantity, attains a minimum and then it is an increasing function of production quantity.

- D.
None of the above.

Answer: Option D

**Explanation** :

From the table below it can be inferred that none of the options 1, 2 and 3 are true because MC keeps on fluctuating.

Hence, option 4.

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**33. CAT 2000 LRDI | DI - Tables & Graphs**

Suppose that each widget sells for Rs 150. What is the profit earned by ABC Ltd. in July? (Profit is defined as the excess of sales revenue over total cost.)

- A.
2400

- B.
1600

- C.
400

- D.
0

Answer: Option C

**Explanation** :

Sales Revenue = 150 × 40 = 6000

Total Cost for 40 widgets in July = 5600

∴ Profit = 6000 – 5600 = Rs. 400

Hence, option 3.

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**34. CAT 2000 LRDI | DI - Tables & Graphs**

Assume that the unit price is Rs. 150 and profit is defined as the excess of sales revenue over total costs. What is the monthly production level of ABC Ltd. at which the profit is highest?

- A.
30

- B.
50

- C.
60

- D.
40

Answer: Option A

**Explanation** :

Profit = Sales Revenue – Total cost

Profit at 30 units = (150 × 30) – (800 + 2500)

= 4500 – 3300

= Rs. 1200

∵ Second shift charges will be incurred as the cost when the number of widgets are more than 30.

Profit at 40 units = (150 × 40) – (800 + 1200 + 3700)

= 6000 – 5700

= Rs. 300

Profit at 50 units = (150 × 50) – (800 + 1200 + 5000)

= 7500 – 7000

= Rs. 500

Profit at 60 units = (150 × 60) – (800 + 1200 + 6700)

= 9000 – 8700

= Rs. 300

∴ Profit at 30 units will be maximum.

Hence, option 1.

Workspace:

**35. CAT 2000 LRDI | DI - Tables & Graphs**

For monthly production level in the range of 0 to 30 units

- A.
AC is always higher than MC.

- B.
AC is always lower than MC.

- C.
AC is lower than MC up to a certain level and then is higher than MC.

- D.
None of the above is true.

Answer: Option D

**Explanation** :

From the table it is clear that none of the statements is true.

Hence, option 4.

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**36. CAT 2000 LRDI | LR - Operator Based Questions**

**Choose 1**; if the question can be answered by using one of the statements alone, but cannot be answered using the other statement alone.

**Choose 2**; if the question can be answered by using either statement alone.

**Choose 3**; if the question can be answered by using both statements together, but cannot be answered using either statement alone.

**Choose 4**; if the question cannot be answered even by using both statements together.

For any two real numbers

a ⊕ b = 1 if both a and b are positive or both a and b are negative.

= –1 if one of the two numbers a and b is positive and the other negative.

What is (2 ⊕ 0) ⊕ (–5 ⊕ –6)?

- a ⊕ b is zero if a is zero.
- a ⊕ b = b ⊕ a

- A.
1

- B.
2

- C.
3

- D.
4

Answer: Option C

**Explanation** :

(2 ⊕ 0) ⊕ (–5 ⊕ –6)

= (2 ⊕ 0) ⊕ 1

From statement A

(0 ⊕ 2) = 0 but we don’t know the value of (2 ⊕ 0).

∴ Statement A alone is not sufficient to answer the question.

From statement B

(2 ⊕ 0) = (0 ⊕ 2)

∴ Statement B alone is not sufficient to answer the question.

After combining both the statements, we get,

(2 ⊕ 0) = (0 ⊕ 2) = 0

∴ (2 ⊕ 0) ⊕ (–5 ⊕ –6)

= (2 ⊕ 0) ⊕ 1

= 0 ⊕ 1

= 0

∴ Both the statements are required to answer the question.

Hence, option 3.

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