Practice Test

Q1) Which of the following is considered production in economics ? Show Answer

Q2) Identify the correct statements Show Answer

Q3) Which of the following is not a characteristic of land ? Show Answer

Q4) Which of the following is true Show Answer

Q5) In the production of wheat ,all of the following are variable factors that are used by the farmer except ; Show Answer

Q6) The marginal product of a variable input is best described as : Show Answer

Q7) Diminishing marginal returns implies Show Answer

Q8) The short run, as economists use the phrase , is characterized by Show Answer

Q9) The marginal , average , & total product curves encountered by the firm producing in the short run exhibits all of the following relationships except Show Answer

Q10) To economists , the main difference between the short run & the long run is that Show Answer

Q11) Which of the following is the best definition of the production function ? Show Answer

Q12) The 'law of diminishing returns' applies to Show Answer

Q13) Diminishing returns occurs Show Answer

Q14) Use this information :- Hours of labour : 0 , Total Output : 0 , Marginal Product : 0 ;, Hours of labour : 1 , Total Output : 100 , Marginal Product : 100 ;,Hours of labour : 2 , Total Output : 0 , Marginal Product : 80 ;,Hours of labour : 3 , Total Output : 240 , Marginal Product : 0 ;, What is the output when 2 hours of labour are employed ? Show Answer

Q15) Use this information :- Hours of labour : 0 , Total Output : 0 , Marginal Product : 0 ;, Hours of labour : 1 , Total Output : 100 , Marginal Product : 100 ;,Hours of labour : 2 , Total Output : 0 , Marginal Product : 80 ;,Hours of labour : 3 , Total Output : 240 , Marginal Product : 0 ;, What is the marginal product of the 3rd hour of labour ? Show Answer

Q16) Use this information :- Hours of labour : 0 , Total Output : 0 , Marginal Product : 0 ;, Hours of labour : 1 , Total Output : 100 , Marginal Product : 100 ;,Hours of labour : 2 , Total Output : 0 , Marginal Product : 80 ;,Hours of labour : 3 , Total Output : 240 , Marginal Product : 0 ;, What is the average product of the first 3 hours hour of labour ? Show Answer

Q17) What is the cost increase continuously with the increase in production ? Show Answer

Q18) Which of the following cost curves is never 'U' shaped ? Show Answer

Q19) Total cost in the short run is classified into fixed cost & variable costs .Which 1 of the following is variable cost ? Show Answer

Q20) In short run ,when the output of a firm increases ,its average fixed cost Show Answer

Q21) The cost of one thing in the term of the alternative given up is known as Show Answer

Q22) With which of the following is the concept of marginal cost closely related ? Show Answer

Q23) Which of the following is true ? Show Answer

Q24) Which of the fallowing is an example of an 'explicit cost ' ? Show Answer

Q25) Which of the fallowing is an example of an ' implicit cost ' ? Show Answer

Q26) Use this information :- Output (O) ; - 0 , Total Cost (TC) : Rs.240 , Output (O) ; - 1 , Total Cost (TC) : Rs.330 ,Output (O) ; - 2 , Total Cost (TC) : Rs.410 ,Output (O) ; - 3 , Total Cost (TC) : Rs.480 ,Output (O) ; - 4 , Total Cost (TC) : Rs.540 ,Output (O) ; - 5 , Total Cost (TC) : Rs.610 ,Output (O) ; - 6 , Total Cost (TC) : Rs.690 , The average fixed cost of 2 units is Show Answer

Q27) Use this information :- Output (O) ; - 0 , Total Cost (TC) : Rs.240 , Output (O) ; - 1 , Total Cost (TC) : Rs.330 ,Output (O) ; - 2 , Total Cost (TC) : Rs.410 ,Output (O) ; - 3 , Total Cost (TC) : Rs.480 ,Output (O) ; - 4 , Total Cost (TC) : Rs.540 ,Output (O) ; - 5 , Total Cost (TC) : Rs.610 ,Output (O) ; - 6 , Total Cost (TC) : Rs.690 , The marginal cost of the sixth units of output is Show Answer

Q28) Use this information :- Output (O) ; - 0 , Total Cost (TC) : Rs.240 , Output (O) ; - 1 , Total Cost (TC) : Rs.330 ,Output (O) ; - 2 , Total Cost (TC) : Rs.410 ,Output (O) ; - 3 , Total Cost (TC) : Rs.480 ,Output (O) ; - 4 , Total Cost (TC) : Rs.540 ,Output (O) ; - 5 , Total Cost (TC) : Rs.610 ,Output (O) ; - 6 , Total Cost (TC) : Rs.690 ,Diminishing marginal returns starts to occur between units Show Answer

Q29) Marginal cost is defined as : Show Answer

Q30) Which of the following is true of the relationship between the marginal cost function & the average cost functions ? Show Answer

Q31) Which of the following statements is true of the relationship among the average cost functions ? Show Answer

Q32) Which of the following is not a determinant of the firm's cost functions ? Show Answer

Q33) Which of the following statements is correct concerning the relationships among the firm's function ? Show Answer

Q34) Suppose output increases in the short run .Total cost will Show Answer

Q35) Which of the following statements concerning the long-run average cost curve is false ? Show Answer

Q36) The negatively-sloped (i.e. falling) part of the long -run average total cost curve is due to which of the following Show Answer

Q37) The positively-sloped (i.e. raising) part of the long -run average total cost curve is due to which of the following Show Answer

Q38) A firm's average total cost is Rs.300 at 5 units of output & Rs.320 at 6 units of output .The marginal cost of producing the 6th unit is Show Answer

Q39) A firm producing 7 units of output has been an average total cost of Rs.150 & has to pay Rs.350 to its fixed factors of production whether it produces or not.How much of the average total cost is made up of variable cost ? Show Answer

Q40) A firm's variable cost is Rs.1,000 at 5 units of output .If the fixed cost are Rs.400 .What will be the average total cost at 6 units of output . Show Answer

Q41) A firm's average cost is Rs.20 at 6 units of output .What will be the cost at 4 units of output . Show Answer

Q42) Which of the following is true ? Show Answer

Q43) Which of the following is a function of an entrepreneur ? Show Answer

Q44) In describing a given problem technology,the short run is best described as lasting Show Answer

Q45) If decreasing returns to scale are present ,then if all inputs are increased by 10 % then Show Answer

Q46) The production function is a relationship between a given combination of inputs & Show Answer

Q47) If the marginal product of labour is below the average product of labour ,it must be true that: Show Answer

Q48) The average product of labour is maximized when marginal product of labour Show Answer

Q49) The law of variable proportions is drawn under all of the assumptions mentioned below except the assumptions that Show Answer

Q50) If the labour is an active factor ,land is Show Answer

Q51) Which of the following is production in economics ? Show Answer

Q52) Which is not a feature of labour ? Show Answer

Q53) Individual supply curve of labour is Show Answer

Q54) Income effect when wages rises means Show Answer

Q55) Which capital includes education , training & skill of the workers ? Show Answer

Q56) Which capital includes durable consumer goods , inventories & intermediate goods ? Show Answer

Q57) Surplus of production over consumption in an accounting year is called Show Answer

Q58) The other names for capital formation is Show Answer

Q59) The second stage of capital formation is Show Answer

Q60) Individual saving levels depends upon Show Answer

Q61) Corporate saving depends upon Show Answer

Q62) For mobilising savings ,we require Show Answer

Q63) Name of the factor of production which hires & organise the production activity Show Answer

Q64) When inputs are transformed into output ,it is called Show Answer

Q65) Technically efficient combinations of inputs is those which Show Answer

Q66) A long-run production function is one in which Show Answer

Q67) Product per unit of labour employed is called Show Answer

Q68) Addition made to 'TP' when one more unit of labour is employed is called Show Answer

Q69) When TP is maximum ,MP is Show Answer

Q70) When AP is maximum ,MP is equal to Show Answer

Q71) When TP is falling, MP is Show Answer

Q72) Reasons for rise in both AP & MP curves is Show Answer

Q73) The shape of both AP & MP curve is Show Answer

Q74) A rational producer will always operate in which stage of law of variable proportion ? Show Answer

Q75) The third stage of law of variable proportion is called Show Answer

Q76) First stage of law of variable proportion ranges from origin till the point where Show Answer

Q77) In the stage of diminishing returns,both AP & MP are falling & Show Answer

Q78) Decreasing return to scale is a stage of Show Answer

Q79) When the increase in output is less than in proportion to increase in inputs , it is called Show Answer

Q80) When labour & capital are increased by 10% & also increases by 10% then we have Show Answer

Q81) The reasons behind increasing returns to scale are Show Answer

Q82) When large firm takes up advertising & grants margin to distribution ,it is called Show Answer

Q83) When large firm diversifies output,market ,etc ,it is called Show Answer

Q84) When a large number of firms at one place gets advantages for which they made no efforts ,it is called Show Answer

Q85) When firm grows so large that it becomes very difficult to manage,it is called Show Answer

Q86) When a person smokes in a non-smoking zone , he causes disutility to other,it is an example of Show Answer

Q87) If a firm takes up too much money on loan & finds it is difficult to repay ,it is a case of Show Answer

Q88) When a manager is over burdened & faces the problems of control & coordination , it is case of Show Answer

Q89) When there is De-centralization of decision making it is case of Show Answer

Q90) When bigger & updated machines are installed then cost falls .what kind of returns to scales takes place ? Show Answer

Q91) The cost which is never zero even when production is shaped is called Show Answer

Q92) The cost which are prime cost & can be changed with changes in the level of output are called Show Answer

Q93) Explicit cash payments made by an entrepreneur to the suppliers of various factors of production Show Answer

Q94) TC is given as Show Answer

Q95) shape of TFC is Show Answer

Q96) The shape of TC curve is Show Answer

Q97) The reasons behind the slope of TC & TVC curve is Show Answer

Q98) AC is obtained by dividing TC by the level of Show Answer

Q99) Addition made to total cost due to change in output by one more unit is called Show Answer

Q100) When AC is falling MC is Show Answer

Q101) When AC is rising MC is Show Answer

Q102) When AC is minimum MC is Show Answer

Q103) Minimum point AC occurs to the right of minimum point of Show Answer

Q104) MC curve passes through minimum point of both AC & Show Answer

Q105) Falling portion of long-run AC curves is due to Show Answer

Q106) LAC curve 'envelopes' Show Answer

Q107) The minimum point of long run AC curve is due to Show Answer

Q108) Which cost curve is called planning curve ? Show Answer

Q109) In a U-shaped long run AC curve there is no extra capacity to meet seasonal variation in demand. It is called ? Show Answer

Q110) Each point on long run AC curve is a point of tangency with the corresponding Show Answer

Q111) AVC can be calculated by the formulae Show Answer

Q112) AFC can be calculated by the formulae Show Answer