CBSE Questions for Class 11 Commerce Economics Production And Costs Quiz 12 - MCQExams.com

A linear or straight downward line of PPC implies:
  • Increasing marginal cost
  • Increasing marginal opportunity cost
  • Decreasing marginal opportunity cost
  • Constant marginal opportunity cost
Average Cost Curve is a-
  • U shaped Curve
  • J shaped Curve
  • L Shaped Curve
  • Straight Line
Long run average cost curves are broadly _____________.
  • U - shaped
  • Inverted U-shaped
  • V- shaped
  • L - shaped
The relationship between the AC and MC is that _________________.
  • MC will always be less than the AC
  • MC will be more than AC when MC is falling
  • AC may be more than MC when MC is rising
  • None of the above
As per the modern view, the shape of long run average cost curve is____.
  • U shaped
  • L shaped
  • Downward sloping
  • None of these
When AC falls as a result of an increasing in output ____________.
  • MC = AC
  • MC < AC
  • MC > AC
  • Nothing can be said
Use the figure and answer below.
What is the shift in PPF from $$PP_1$$ to $$PP_2$$ due to ?

953744_28c7355e1c1b455981ab760688bcebfc.PNG
  • Full employment of resources
  • Improvement in technology
  • Improvement in technology in only butter production
  • Improvement in technology in only gun production
The opportunity cost of increasing gun's Production from 20 to 30 units is equal to-
  • 10 units of bread
  • 15 units of bread
  • 25 units of bread
  • 24 units of bread
When a substantial increase is made in the plant capacity of a firm, this is known as ____________.
  • a short run adjustment
  • a long run adjustment
  • a temporary adjustment
  • none of the above
When average cost is rising, marginal cost __________________.
  • must be rising
  • may be constant
  • might be decreasing
  • none of the above
The point on which the long run average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firm's long run average cost curve. This is ____________.
  • always true
  • never true
  • true when LAC is falling
  • true only at that level of output when LAC is minimum
Given U-shaped average cost curve, the relationship between average cost and marginal cost is such that marginal cost must always be:
  • Falling when average cost is falling
  • Rising when average cost is falling
  • Falling when average cost is rising
  • Rising when average cost is rising
When average cost is constant, marginal cost ______________.
  • is equal to average cost
  • may be constant
  • may be rising
  • may be falling
When average cost is falling, marginal cost ____________.
  • may also be falling
  • may be rising
  • may be rising or falling
  • has no relation with average cost
Both marginal and average costs are equal to each other when, ________.
  • marginal cost is minimum
  • aerage cost is minimum
  • both marginal and average costs are minimum
  • none of the above
Marginal cost curve always cuts the average cost curve:
  • From below on the falling portion of the AC curve
  • From the below on the rising portion of the AC curve
  • From below on the minimum point of the AC curve
  • From the below on any point of the AC curve
As long as average cost curve is rising ______________.
  • Marginal cost is more than average cost
  • Marginal cost is less than average cost
  • Marginal cost is equal to average cost
  • Marginal cost has no relation with average cost
The firm producing at the minimum point of the LAC curve is said to be:
  • Operating under diminishing costs
  • Making optimum use of plant capacity
  • Operating at excess capacity
  • Operating under increasing costs
In a U-shaped long run AC curve there is extra capacity to meet seasonal variation in demand. It is called _________.
  • excess capacity.
  • full capacity.
  • reserve capacity.
  • optimum capacity.
In the long run there is enough time for the firm to cover its losses and earn normal profits. This is because in the long run, all inputs are __________.
  • variable
  • identical
  • homogenous
  • fixed
When bigger and updated machines are installed then cost falls. What kind of returns to scales takes place?
  • Decreasing.
  • Diminishing.
  • Increasing.
  • Constant.
The normal long-run average cost curve is influenced by the __________.
  • principle of diminishing returns
  • economies and diseconomies of large scale production
  • principle of constant returns to scale
  • all of the above
In the long run ___________________.
  • all factors can be used in different proportions
  • management can be reorganized.
  • a firm can experience returns to scale
  • all of the above
Use the figure given to answer Questions.
Opportunity cost of moving from part B to $$P_1$$ is:

954601_adfefa94745b4939a5942186a1567be7.png
  • 50 units of bullet
  • 100 unit of bullet
  • 180 units of gun
  • 110 units of gun
The long-run average cost is based on the fact that ____________.
  • none of the factors are variable in the long-run
  • all factors are perfectly divisible in the long-run
  • none of the factors is divisible
  • management factor is indivisible, while all the other factors are divisible and can be varied in the long-run
Each point on long-run AC curve is a point of tangency with the corresponding ___________.
  • short run AC curves.
  • short run AVC curves.
  • short run MC curves.
  • short run AFC curves.
The value added by a firm is equal to __________.
  • its sales
  • its profits
  • its sales minus cost of intermediate goods
  • cost of producing the goods less cost of raw materials
It is because of the law of variable proportions that MP curve makes an inverted-U.
  • True
  • False
In the context of long run production function, factor ratio is ______________.
  • variable
  • constant
  • variable as well as constant
  • none of these
Slope of PPF between points A and B is equal to
955789_eebf4f2793d14d8994815d67ea51f0b8.png
  • $$1.2$$
  • $$2.3$$
  • $$3.2$$
  • $$4.3$$
0:0:1


Answered Not Answered Not Visited Correct : 0 Incorrect : 0

Practice Class 11 Commerce Economics Quiz Questions and Answers