CBSE Questions for Class 11 Commerce Economics Production And Costs Quiz 4 - MCQExams.com

In the long run, when increasing returns to scale operates, _______.
  • the average cost rises as the firm increases output
  • the average cost falls as the firm increases output
  • average cost remains constant as long as CRS operates
  • none of the above
LRMC curve is ____.
  • V-shaped
  • U shaped
  • inverse U shaped
  • inverse V-shaped
In the long run, when decreasing returns to scale operates,  _____.
  • the average cost must be rising as the firm increases output
  • the average cost must be falling as the firm increases output
  • average cost remains constant
  • none of the above
In the long run, when Constant returns to scale operates,  _______.
  • the average cost falls as the firm increases output
  • the average cost must be rising as the firm increases output
  • average cost remains constant as long as CRS operates
  • none of the Above
The application of scientific methods to production process is known as ______.
  • technical know how
  • capital formation
  • invention
  • capital accumulation
Production process creates utilities in _______.
  • form
  • place
  • time
  • all of the above
Total output is maximum when ______.
  • MP=0
  • MP is increasing
  • MP is decreasing
  • MP is constant
Marginal product is _______.
  • rate at which total production changes with change in variable input
  • rate at which total production changes with change in total cost
  • rate at which total production changes with change in fixed cost
  • none of the above
The slope of the total production curve measures _______.
  • average production
  • minimum production
  • marginal production
  • maximum production
Excise duty is a tax levied on which of the following?
  • Production of goods
  • Purchase of goods
  • Export of goods
  • Sale of goods
In the long run diseconomics of scale arises due to ________.
  • heavy investment in fixed assets
  • long run average total cost increases with increased production
  • firm compete for labour force and pay more wages
  • firm buy raw material in gray market at higher prices
Labour is a perishable factor of production. 
  • True
  • False
Long run supply curve of an increasing cost industry is _______.
  • horizontal line overlapping X axis
  • upward sloping line
  • downward sloping line
  • vertical line
Which of the following curve cannot take U shape?
  • AVC
  • AC
  • AFC
  • MC
Analysis of short-run production functions forms the subject of matter of ______.
  • law of variable proportion
  • law of demand
  • law of returns to scale
  • law of marginal utility
An isoquant joins all factor inputs which ________.
  • yield same level of output
  • give same marginal utility
  • have same marginal cost
  • have same average cost
Slope of Isoquant is equal to ______.
  • marginal rate of technical substitution between the factor inputs
  • relative price of each factor inputs
  • demand of each factor input
  • supply of each factor input
Which of these is/are characteristic of an isoquant?
  • Convex to origin
  • Negative sloped
  • Never cross each other
  • All of the above
A firm in a increasing cost industry expands it's production _______.
  • at the same cost of production
  • with increased production cost
  • with reduced production cost
  • none of the above
Which of the following cannot be U shaped curve?
  • AFC curve
  • AC curve
  • AVC curve
  • AMC curve
The following table shows the combination of X and Y two factor inputs which are on the same Isoquant line.

CombinationX(quantity)Y(quantity)
A120
B215
C311
D47

The marginal rate of substitution for B combination is _______.
  • 4
  • 5
  • 2
  • 1
At the point of equilibrium ________=________
  • Slope of Isoquant =Slope of Isocost line
  • Slope of Isoquant
  • Slope of Isoquant>Slope of Isocost line
  • None of the above
Marginal cost can be equal to average variable cost when _________.
  • average variable cost is falling
  • average variable cost is increasing
  • average variable cost is minimum
  • under any of the above situations
Tick the true statement.
  • Any point outside PPC is attaining with the same inputs.
  • Advancement in technology would cause PPC to shift inward.
  • Any economy operating at any point inside the PPC is inefficient.
  • If an economy is operating at PPC, it can increase output of one item without sacrificing the output of other one.
If fixed cost of a product is $$90,000$$ and unit variable cost Rs. $$25$$ and selling price Rs. $$55$$. Find the Break even quantity_____.
  • $$(4500)$$
  • $$(5400)$$
  • $$(3000)$$
  • $$(1525)$$
A is a telecomminication engineer, has high value of Marginal productivity because $$A$$ is____.
  • more skilled
  • is highly paid
  • delivers high value products and services
  • all the three
In the long run price is governed by __________.
  • cost of production
  • demand supply forces
  • marginal utility
  • all of the above
The negatively sloped part of long run cost curve of a firm is due to __________.
  • economies of scale such as specialization and division of labour
  • diseconomies of scale
  • diminishing returns to scale
  • marginal utility theory
If production possibility frontier (PPF) exhibits diminishing marginal product, the slope of the PPF shows which of these characterists?
  • It becomes flatter as the quantity of input is increased.
  • It assumes the shape of a hyperbola as the quantity of one input is increased.
  • It becomes more steep with increases in quantity of input.
  • May take any of the above three forms.
Which of these statement is more appropriate for Fixed costs ____________?
  • Fixed cost is fixed only in short run
  • It is fixed in long run also
  • It varies with the change in level of output
  • It is strictly avoidable in short run also
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