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CBSE Questions for Class 11 Commerce Economics Production And Costs Quiz 14 - MCQExams.com
CBSE
Class 11 Commerce Economics
Production And Costs
Quiz 14
Find out Marginal cost of 67 units of production:
Output
0
10
25
37
67
Total cost
160
200
300
500
1,400
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0%
10
0%
20
0%
30
0%
50
Explanation
Output
Total cost (TC)
Marginal cost = ∆TC/∆Q
0
160
----
10
200
(200-160)/(10-0)=4
25
300
(300-200)/(25-10)=6.67
37
500
(500-300)/(37-25)=16.67
67
1,400
(1,400-500)/(67-37)= 30
Clearly, at 67 units marginal cost is 30. Hence, correct answer is option C.
Law of variable proportion explains three stages of production. In the first stage of
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0%
Both MP and AP rise
0%
MP rises
0%
AP falls
0%
MP is zero
Explanation
In the first stage, total production increases at an increasing rate whereas average product and marginal product both rise. The point where the total product changes its slope and where MP is maximum is known as the point of inflection. In this stage, the AP curve is positively sloped throughout and MP first increases and then reaches a maximum and then starts decreasing but is positive in nature.
Hence, option A is correct.
The iso-quants enabled the producer to choose a factor combination which __________________.
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0%
Yields his maximum profit
0%
Produces output at the maximum level
0%
Produces output at the minimum cost
0%
Yields his maximum satisfaction
What is the marginal product when 3 hours of labour is employed?
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0%
60
0%
80
0%
100
0%
120
The Cobb-Douglas production function implies:
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0%
Increasing return to scale
0%
Decreasing return to scale
0%
Constant return to scale
0%
Laws of returns
Explanation
The Cobb-Douglas production function implies to constant return to scale.
It reflects the relationship between its inputs and the outputs produced. It means calculating the impact of changes , the relevant efficiencies and the yield of production activities.
Total output at 4th unit is _______.
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0%
36
0%
55
0%
48
0%
60
The rate at which one product is transformed into another is called _____________.
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0%
marginal rate of substitution
0%
marginal rate of transformation
0%
marginal rate of technical substitution
0%
production possibility curve
Explanation
The marginal rate of transformation is the rate at which one product is transferred into another.
Marginal rate of substitution is the rate at which one good must be sacrificed in order to produce a single extra unit of another good, assuming that both goods require the same scarce output.
Nil marginal product indicates _______.
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0%
bottom level production
0%
top level production
0%
average production
0%
normal production
Explanation
There are relationship between TP and MP is as follows:
1. When TP increases at an increasing rate, MP increases.
2. When TP increases at diminishing rate MP declines.
3. When TP reaches its maximum then MP becomes zero.
4. When TP begins to decline then MP becomes negative.
Hence b is the correct option.
Marginal output at 1st unit is _______.
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0%
8
0%
4
0%
7
0%
5
When MC curve cuts AC curve ________.
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0%
AC $$=$$ MC
0%
AC $$<$$ MC
0%
AC $$>$$ MC
0%
both AC and MC are falling
Whether a firm will plan for short-run or long-run production depends upon the ________________.
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0%
Nature of demand for its product
0%
Availability of inputs
0%
State of technology
0%
All of above
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 ________.
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0%
Rs. $$420$$
0%
Rs. $$120$$
0%
Rs. $$320$$
0%
Rs. $$300$$
Due to External Diseconomies of Scale, the Long Run Average Cost (LAC) Curve -
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0%
Shifts inward
0%
Remains constant
0%
Shifts outward
0%
Is not affected at all
Read the Table below & answer the following question:
Labour Input
Marginal Product
Total Product
Average Product
0
0
0
0
1
25
2
90
3
120
4
140
5
28
6
20
If Labour Input = 4, Output per worker is-
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0%
20
0%
35
0%
45
0%
90
A product can be produced using two input combinations A and B. Combination A takes 2 units of Labour and 8 units Capital. Combination B takes 3 units of Labour and 5 units of capital, what is the Marginal Rate of Technical Substitution of Labour for Capital?
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0%
0
0%
2
0%
3
0%
5
Which of the following assumption is not applicable to the law of variable proportion?
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0%
The law operates in the long run.
0%
There are two factors of production.
0%
The technology remains constant.
0%
Both (B) and (C).
Explanation
The law cannot operate in the long run as it is only possible for the law of variable proportions to operate under specific conditions.
1. The state of technology is given and remains unchanged.
2. It is assumed that some inputs are fixed while others are varied. As it is only then that the factor proportions can be changed.
3. It is assumed that technology is such that it is possible to change the factor proportions. The law will not apply in situations where the factors of production must be used in fixed proportions.
4. It is assumed that all the units of the variable factor are homogeneous and are equally efficient. (eg every worker hired is equally efficient).
These conditions are only met in the short run.
Let TP = Total Product, AP = Average Product and MP = Marginal Product. Use the following table and answer the Questions.
Quantity of Variable Factor
TP (in units)
AP (in units)
MP (in units)
1
1000
A
B
2
C
D
600
3
E
700
F
4
2100
G
H
5
I
400
J
Find the value of "B" in the above Table.
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0%
1000
0%
2000
0%
3000
0%
0
Let TP = Total Product, AP = Average Product and MP = Marginal Product. Use the following table and answer the Questions.
Quantity of Variable Factor
TP (in units)
AP (in units)
MP (in units)
1
1000
A
B
2
C
D
600
3
E
700
F
4
2100
G
H
5
I
400
J
Find the value of "A" in the above Table.
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0%
1000
0%
2000
0%
3000
0%
0
Let TP = Total Product, AP = Average Product and MP = Marginal Product. Use the following table and answer the Questions.
Quantity of Variable Factor
TP (in units)
AP (in units)
MP (in units)
1
1000
A
B
2
C
D
600
3
E
700
F
4
2100
G
H
5
I
400
J
Find the value of "E" in the above Table.
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0%
1100
0%
1600
0%
1700
0%
2100
A functional relationship between inputs and output is called ____
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0%
Cost function
0%
Revenue function
0%
Consumption function
0%
Production function
Explanation
Given,
Functional relationship between inputs and outputs is called ______
Option (a) Cost Function :
It is a mathematical formula used to chart how production expenses will change at different output levels.
Option (b) Revenue Function :
It is equal to the number of units sold times the price per unit.
Option C) Consumption Function:
t is the relationship between consumer spending and the various factors determining it.
Option d) Production Function :
Functional relationship between inputs and outputs.
Hence by definition Production function is correct.
TC increases at an increasing rate when MC is ______.
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0%
constant
0%
increasing
0%
decreasing
0%
negative
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