MCQExams
0:0:1
CBSE
JEE
NTSE
NEET
Practice
Homework
×
CBSE Questions for Class 11 Commerce Economics Production And Costs Quiz 7 - MCQExams.com
CBSE
Class 11 Commerce Economics
Production And Costs
Quiz 7
Variable costs include costs of _______.
Report Question
0%
hiring the building for the factory
0%
purchase of heavy machines
0%
pay wages to factory manager
0%
paying the laborers
Explanation
Variable cost varies with the level of production output. This cost rises as the production output level rises and decreases as the production output level decreases. For example- electricity bill, wages and salaries to labours. Variable cost is zero at zero level of production and rises with the rise in production.
Fixed cost is the cost which is incurred on the fixed factors fixed factors includes machinery, buildings etc.
Hence, option D is correct.
The production possibility frontier shows the of production that can be obtained by an economy, given _______________.
Report Question
0%
minimum amounts; efficiency
0%
minimum amounts; technology and inputs to production
0%
maximum amounts; technology and inputs to production
0%
maximum amounts; efficiency
Explanation
Production possibility frontier is a curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.
It sets the relationship between the scarce resources and the production of two commodities where it is decided the ratio of resource utilization for the production of the two goods.
Hence a is the correct answer.
In the first stage of the Law of Variable Proportions the marginal product is negative of the __________.
Report Question
0%
fixed factor
0%
variable factor
0%
semi variable factor
0%
both a and c
Stage II of Law of Variable Proportions begins where the average product _______.
Report Question
0%
begins to fall
0%
is maximum
0%
is minimum
0%
begins to rise
Explanation
The marginal product will cross the average product at its maximum point. After which as the marginal product continues falling it will drag down the average product, since the productivity falls with increase in additional units of variable factor.
Non technical product differentiation is _____________.
Report Question
0%
Performance
0%
Packing
0%
size
0%
Both b & c
All but one of the following is not an U-shaped curve.
Report Question
0%
The AVC curve
0%
The AFC curve
0%
The AC curve
0%
The MC curve
Explanation
The
AFC curve
is downward sloping because as output increases, the firm spreads its fixed costs over larger and larger amounts of output.
Hence, the correct option is B.
Suppose the total Fixed Cost is Rs 120.
Output
1
2
3
4
5
ATC
240
160
140
160
180
What is total variable cost of the 3rd unit?
Report Question
0%
120
0%
200
0%
300
0%
520
Regarding the law of variable proportions, all inputs are free to vary. It is ___________.
Report Question
0%
absolutely wrong
0%
wrong, because one input is fixed while the other is free to vary
0%
correct and the two inputs are not perfect complements
0%
both (a) and (b) are correct
Explanation
The law of variable proportions is as follows: “If a producer increases the units of a variable factor while keeping other factors fixed, then initially the total product increases at an increasing rate, then it increases at a diminishing rate, and finally starts declining.”
As one input is fixed while the other is free to vary so it is wrong.
Hence option d is the correct option.
If profit is to rise as output expands, then marginal profit should be ____________.
Report Question
0%
rising
0%
falling
0%
constant
0%
positive
Which of the following statement best describe the general form of a production function?
(i) It is purely technological relationship between quantities of input and quantities of output.
(ii) It represent the technology of an organization/sector of an economy.
(iii) Prices of inputs or of the output do not enter into the production function.
(iv) It is flow concept describing the transformation of inputs into output per unit of time.
Report Question
0%
(i), (ii) and (iii)
0%
(i) and (ii)
0%
(i) and (iv)
0%
(i), (ii), (iii) and (iv)
Explanation
The elements of the production function are the inputs and output of the firm and how the former is changed into the latter. It considers the technology available to the firm and the economic sector it operates in.
It does not factor in the prices of inputs or outputs, however the price of inputs is considered in the iso-cost line and used alongside the production function.
What is true in a situation of Diminishing marginal returns of Labour?
Report Question
0%
Diminishing product of labour must be falling
0%
Marginal product of labour must be rising
0%
Marginal product of labour must be falling
0%
None of the above
With existing resources the economy can be achieved to the fullest by:
Report Question
0%
Productive efficiency
0%
Allocative efficiency
0%
Full employment
0%
All of the above
Explanation
Economic efficiency is when all goods and factors of production in an economy are distributed or allocated to their most valuable uses and waste is eliminated or minimized.
Economic efficiency can involve efficient production decisions within firms and industries, efficient consumption decisions by individual consumers, and efficient distribution of consumer and producer goods across individual consumers and firms. Hence, correct answer is option A.
In the presence of Diminishing Marginal Rate of Technical Substitution between Labour and Capital, output can be kept unchanged only if __________.
Report Question
0%
equal successive sacrifices of capital go hand in hand with even smaller increases of labor
0%
equal successive sacrifices of labour go hand in hand with even smaller increases of capital
0%
equal successive increases in labor go hand in hand with even smaller increases in capital
0%
equal successive increases in labor go hand in hand with even smaller sacrifices of capital
Explanation
Diminishing Marginal Rate of Technical Substitution talks about the rate of decrease of one factor at which the same level of output is achieved and the other factor is increased. Thus, Option D is the right answer. Labor employed will be successively and slowly increased with the Capital put in diminishing slowly.
The marginal productivity theory relates to the ______________.
Report Question
0%
remuneration of resources
0%
demand and supply of resources
0%
concept of scarcity
0%
noncompetitive aspects of the resource market
Characteristic feature Uncommon with the primary production of function are ____________.
Report Question
0%
it costs money
0%
it is inelastic
0%
it is immobile
0%
it needs Labour
Which of the following is NOT included in the decisions that every society must make ?
Report Question
0%
what goods will be produced
0%
who will produce goods
0%
what determines consumer preferences
0%
who will consume the goods
Explanation
Consumer preferences are defined as the subjective (individual) tastes, as measured by utility, of various bundles of goods. They permit the consumer to rank these bundles of goods according to the levels of utility they give the consumer. Every society has to deal with the following 3 following problems:
what goods will be produced,
who will produce goods, and
who will consume the goods.
Hence, correct answer is option C.
Production is ________________.
Report Question
0%
creation of something
0%
creation of value
0%
creation of Utility
0%
Both b& c
Explanation
(D) Both $$b$$ and $$c$$
because the production is the creation of value as well as the utility which is stand by the consumers utility, there needs and the value of money.
Which of the following statement about the relationship between marginal cost and average cost is correct?
Report Question
0%
when MC is falling, AC is falling.
0%
AC equals MC and MC's lowest point.
0%
When MC exceeds AC, MC must be rising.
0%
When AC exceeds MC, MC must be rising.
Explanation
solution:
from the given figure we can say that when MC exceeds , MC must be rising .
hence the correct option: C
Which of the following cannot be considered a factor of production?
Report Question
0%
Land
0%
Labour
0%
Loss
0%
Capital
Law of "Return to Scale" operates in the ____________________.
Report Question
0%
long run
0%
short run
0%
very short period
0%
None of above
In the long run production function all inputs are fixed.
Report Question
0%
True
0%
False
0%
Partly true
0%
None of the above
Explanation
In the long run all factors are variable as the firm has enough time and other resources to vary any of its factors of production.
The production function is a relationship between a given combination of inputs and _______________.
Report Question
0%
another combination that yields the same output.
0%
the highest resulting output.
0%
the increase in output generated by one unit increase in one output.
0%
all levels of output that can be generated by those inputs.
Explanation
Production function shows the relationship between inputs and outputs.
Q= f(L,K)
L= Labour
K=Capital
The two factors of production labour and capital have a great impact on the output produced. The law of variable proportion explains the relationship between total product, marginal product and average product in the short run.
Hence, option D is correct.
If both average cost (AC) and marginal cost (MC) are (U) shaped, then ________________________.
Report Question
0%
AC will reach a minimum at a level of output that is less than that at which MC reaches a minimum
0%
AC > MC
0%
AC will reach a minimum at a level of output that is at which MC reaches a minimum
0%
AC = MC
Which of the following statements about the relationship between marginal cost and average cost is incorrect?
Report Question
0%
None of the above
0%
when MC is falling, AC is falling
0%
AC equals MC and MC's lowest point.
0%
When MC exceeds AC, it must be falling
What is meant by production process?
Report Question
0%
Relationship between quantity of output produced and time taken to produce the output.
0%
Relationship between a factor of production and the utility created by it.
0%
Relationship between fixed factors of production and variable factors of production.
0%
Technical relationship between physical inputs and physical output.
Explanation
The production process is the purely technological relationship between quantities of input and quantities of output.
It is a flow concept describing the transformation of inputs into output per unit of time.
It is described by the production function that
represents the technology of an organization and the sector of the economy that it operates in.
The marginal cost ,when output is at equilibrium, is 10 is equal to ______________.
Report Question
0%
the slope of a line drawn tangent to the total cost curve where output = 10.
0%
the total cost of 10 units of output divided by its average cost.
0%
the average cost of 10 units
0%
None of the above
Explanation
When output is at equilibrium, the marginal cost is equal to the average cost, that is , 10 units.
Hence, the correct option is C.
Which of the following is the best definition of the "production function"?
Report Question
0%
The relationship between market price and quantity supplied
0%
The relationship between the firm's total revenue and the cost of production
0%
The relationship between the quantities of inputs needed to produce a given level of output.
0%
The relationship between the quantity of inputs and the firm's marginal cost of production.
Explanation
The arguments of the production functions are the proportions of various factor inputs that need to be employed to produce a specific output. The most common form of the production function is the Cobb-Douglas production function.
Hence c is the correct answer.
The law of variable proportion shows the production function with _____________.
Report Question
0%
keeping all input factors fixed
0%
keeping all input factors variable
0%
keeping at least one factor input fixed and others variable
0%
keeping at least one factor variable and others fixed
Laws of production does not include __________________.
Report Question
0%
returns to scale
0%
law of diminishing returns to a factor
0%
law of variable proportions
0%
least cost combination of factors.
The marginal cost for a firm of producing the $$9$$th unit of output is Rs$$20$$. Average cost at the same level of output is Rs$$15$$. Which of the following must be true?
Report Question
0%
Marginal cost and average cost are both falling.
0%
Marginal cost and average cost are both rising.
0%
Marginal cost is rising and average cost is falling.
0%
It is impossible to tell if either of the curves are rising or falling.
0:0:1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0
Answered
0
Not Answered
0
Not Visited
Correct : 0
Incorrect : 0
Report Question
×
What's an issue?
Question is wrong
Answer is wrong
Other Reason
Want to elaborate a bit more? (optional)
Practice Class 11 Commerce Economics Quiz Questions and Answers
<
>
Support mcqexams.com by disabling your adblocker.
×
Please disable the adBlock and continue.
Thank you.
Reload page
