Practice Test

Q1) According to _______, "Production is a process by which goods and services are created". Show Answer

Q2) The factors of production may be defined as resources which help the firms to produce goods or services. Show Answer

Q3) Which of the following is considered production in economics? Show Answer

Q4) Which of the following cannot be treated as factor of production? Show Answer

Q5) Which of the following cannot be treated as factor of production? Show Answer

Q6) Which of the following factors of production is free gift of nature? Show Answer

Q7) In economics, land includes natural resources ________. Show Answer

Q8) Which of the following is not true regarding 'land' as a factor of production? Show Answer

Q9) Supply of land is ________. Show Answer

Q10) Which of the following is true regarding 'land' as a factor of production? Show Answer

Q11) Which of the following is not a characteristics of land? Show Answer

Q12) Which of the following statements is correct? Show Answer

Q13) In economics, the term labour means human efforts or activity which includes: _____. Show Answer

Q14) Which of the following is sacient feature of 'Labour'as factor of production? Show Answer

Q15) Which of the following is sacient feature of 'Labour'as factor of production? Show Answer

Q16) Which of the following is sacient feature of 'Labour'as factor of production? Show Answer

Q17) In economics, the term 'Capital' means _______. Show Answer

Q18) Which factors of production brings the other factors of production to produce economic goods and services. Show Answer

Q19) The functional relationship between input and output is known as _________. Show Answer

Q20) The production function is a relationship between a given combination of inputs and ________. Show Answer

Q21) What is a production process? Show Answer

Q22) In economics, _______ is a period where some factor inputs are fixed, while the others are variable. Show Answer

Q23) In economics, ______ is a period where all factor inputs are variable. Show Answer

Q24) Whether a firm will plan for short-run or long-run production depends upon the _______. Show Answer

Q25) In the long run _______. Show Answer

Q26) In the long run production function all inputs are fixed. Show Answer

Q27) "Law of diminishing returns"or "Law of variable proportion"operate in _____. Show Answer

Q28) The "Law of diminishing returns" applies to: _________. Show Answer

Q29) Law of "Returns to Scale"operates in ____. Show Answer

Q30) The law of variable proportion shows the production function with _______. Show Answer

Q31) The law of variable proportion states that, if one factor is used more and more (variable), keeping the other factors constant, the total output will _______. Show Answer

Q32) According to ________, "As we increase the quantity of any one input which is combined with a fixed quantity of the other inputs, the marginal physical productivity of the variable input must eventually decline". Show Answer

Q33) According to _______, "An increase in some inputs relative to other fixed inputs will in a given state of technology, cause output to increase but after a point the extra output resulting from the same additions of extra inputs will become less and less". Show Answer

Q34) Which of the following assumption is applicable for the law of variable proportions? Show Answer

Q35) Which of the following assumption is not applicable for the law of variable proportion? Show Answer

Q36) According to ______, "An increase in the capital and labour applied in the cultivation of land causes in general a less than proporionate increase in the amount of product raised unless it happens to coincide with an improvement in the arts of agriculture". Show Answer

Q37) When total product increases at an increasing rate, it is known as ______. Show Answer

Q38) When total product continues to increase at a diminishing rate, it is known as ________. Show Answer

Q39) When total product decreases and marginal product becomes negative, it is known as ______. Show Answer

Q40) As per law of variable proportion, which of the following may become negative ________. Show Answer

Q41) "Law of Returns to Scale" is a ______ concept. Show Answer

Q42) Proportionate increase in all factors of production results in a more than proportionate increase in output is a case of ______. Show Answer

Q43) When inputs are increasing in a given proportion and output increases in the same proportion it is a case of _______. Show Answer

Q44) If a proportionate increase in all inputs results in less than proportionate increase in output, it is a case of ________. Show Answer

Q45) If increase returns to scale are present, then if all inputs are increased by 10% then: _______. Show Answer

Q46) If decreasing returns to scale are present, then if all inputs are increased by 10% then: ______. Show Answer

Q47) If constant returns to scale are present, then if all inputs are increased by 10% then: _____. Show Answer

Q48) Which is a true statement? Show Answer

Q49) Which of the following statements is true? Show Answer

Q50) Total Fixed Cost Curve (TFC) is ______. Show Answer

Q51) _______ are those cost which do not change with change in output. Show Answer

Q52) ______ are those cost which changes in same proportion with change in output. Show Answer

Q53) Even if the firm closes down for some time in the short run but remains in business, ________ have to be borne by it. Show Answer

Q54) Which of the following is variable cost? Show Answer

Q55) Which of the following is variable cost? Show Answer

Q56) _______ is the addition made to the total cost by production of an additional unit of output. Show Answer

Q57) Total Cost=________. Show Answer

Q58) Marginal cost curve ______ as output increases in the beginning. Show Answer

Q59) Marginal cost curve falls as output increases in the beginning. It starts rising after a certain level of output. This happens because of the influence of the _______. Show Answer

Q60) Marginal cost curve of a firm is ______ shaped. Show Answer

Q61) With which of the following is the concept of marginal cost closely related? Show Answer

Q62) The term ______ is defined as that length of time over which the firm gets an opportunity to vary if need be the quantities of all its inputs. Show Answer

Q63) Average cost curve of a firm is _______. Show Answer

Q64) Which of the following cost curves is never 'U' shaped? Show Answer

Q65) ________ are those which can easily be identified by a producing unit and are directly related to a unit of operation like a product, a process or a department of the firm. Show Answer

Q66) _______ are not traceable to plant, department or unit of operation or individual final product. Show Answer

Q67) _______ is one which is not affected or altered by a change in the level or nature of business activity. Show Answer

Q68) _______ is the addition to change in the level or nature of business activity. Show Answer

Q69) Which cost increase continuously with the increase in production? Show Answer

Q70) Which of the following sentence depicts the correct relationship between Average Cost and Marginal Cost? Show Answer

Q71) A firm's average total cost is Rs.300 at 5 units of output and Rs.320 at 6 units of output. The marginal cost of producing the 6th unit is: _______. Show Answer

Q72) A firm producing 7 units of output has an average total cost of Rs.150 and 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 costs? Show Answer

Q73) A firm has a variable cost of Rs.1,000 at 5 units of output. If fixed costs are Rs.400, what will be the average cost at 5 units of output? Show Answer

Q74) A firm's average fixed cost is Rs.20 at 6 units of output. What will it be at 4 units of output? Show Answer

Q75) The average fixed cost of 2 units of output is A firm's average fixed cost is Rs.20 at 6 units of output : ________. Show Answer

Q76) The marginal cost of the sixth unit of output is A firm's average fixed cost is Rs.20 at 6 units of output : ______. Show Answer

Q77) Diminishing marginal returns start to occur between units A firm's average fixed cost is Rs.20 at 6 units of output : _______. Show Answer

Q78) ________ represents total sales proceeds of the firm and is equal to per unit price multiplied by the quantity sold. Show Answer

Q79) _______ is the addition to total revenue when the quantity sold is increased by one unit. Show Answer

Q80) ______ is per unit price of the product. Show Answer

Q81) If AR curve runs parallel to X-axis, it means ______. Show Answer

Q82) Producer's equilibrium refers to the level of output of a commodity that gives the _______ to the producer of that commodity. Show Answer

Q83) Equilibrium is defined as a situation in which _______. Show Answer

Q84) As per Total Revenue less Total Cost (TR-TC) approach of looking at the producer's equilibrium, which of the following condition is necessary for producer's equilibrium? Show Answer

Q85) As per Marginal Revenue and Marginal Cost (MR & MC) approach of looking at the producer's equilibrium, which of the following condition is necessary for producer's equilibrium? Show Answer

Q86) A firm should close down if profits are zero. Show Answer

Q87) ______ take care of all the payments and charged made by the entrepreneur to the suppliers of various productive factors. Show Answer

Q88) Economic costs include: _________. Show Answer

Q89) Opportunity cost is ________. Show Answer

Q90) ______ relate to those costs only which involve cash payments by the entrepreneur of the firm. Show Answer

Q91) ______ take into account these accounting costs but in addition, they also takes into account the amount of money the entrepreneur could have earned if he had invested his money and sold his own services and other factors in the next best alternative uses. Show Answer

Q92) Accounting costs are also called _______. Show Answer

Q93) _______ are costs that are readily identified and are traceable to a particular product, operation or plant. Show Answer

Q94) ______ are not readily identified nor visibly traceable to specific goods, services, operations. Show Answer

Q95) ______ are not a function of output; they do not vary with output up to a certain level of activity. Show Answer

Q96) _______ are costs that are function of output in the production period and changes in proportion to output. Show Answer

Q97) Which of the following statements about the relationship between marginal cost and average cost is correct?
Show Answer