Principles Of Economics And Management (3140709) MCQs

MCQs of Theory of Production and Cost

Showing 11 to 20 out of 32 Questions
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11.
Which is correct for the law of variable proportions?
(a) How much output change if the number of units of a variable factor is increased, keeping other factors constant.
(b) How much output change if the number of units of a variable factor is increased, with other factors also increase with the same amount.
(c) How much output change if the number of units of a variable factor is increased, with other factors also increase with a slow rate.
(d) How much output change if the number of units of a variable factor is increased, with other factors also increase with a fast rate.
Answer:

Option (a)

12.
Which is not the correct stage of production in the law of variable proportions?
(a) Increasing Returns
(b) Diminishing Returns
(c) Positive Marginal Returns
(d) Negative Marginal Returns
Answer:

Option (c)

13.
Which is the best stage of production in the law of variable proportions?
(a) Increasing Returns
(b) Diminishing Returns
(c) Positive Marginal Returns
(d) Negative Marginal Returns
Answer:

Option (b)

14.
Which is not a correct assumption for the law of returns to scale?
(a) All factors (inputs) are constant but the enterprise may change.
(b) A worker works with given tools and implements.
(c) Technological changes are absent.
(d) There is perfect competition.
Answer:

Option (a)

15.
Which is correct for the law of returns to scale?
(a) Returns to scale refer to the relationship between changes in output and proportionate changes in one factor of production.
(b) Returns to scale refer to the relationship between changes in output and proportionate changes in all factors of production.
(c) Returns to scale refer to the relationship between changes in output and different changes in all factors of production.
(d) Returns to scale refer to the relationship between changes in output and different changes in two factors of production.
Answer:

Option (b)

16.
Which is not the correct stage of production in the law of returns to scale?
(a) Increasing Returns
(b) Constant Returns
(c) Diminishing Returns
(d) No Returns
Answer:

Option (d)

17.
Which cost belongs to category based on service tenure?
(a) Variable cost
(b) Long-run cost
(c) Total cost
(d) Fixed cost
Answer:

Option (b)

18.
Which cost belongs to a category based on behaviour to production volume?
(a) Variable cost
(b) Short-run cost
(c) Average cost
(d) Implicit cost
Answer:

Option (a)

19.
Which cost belongs to category based on relation to certain specified volume?
(a) Long-run cost
(b) Marginal cost
(c) Fixed cost
(d) Variable cost
Answer:

Option (b)

20.
If we want to increase production than we need to purchase more raw material. This cost is called :
(a) Fixed cost
(b) Opportunity cost
(c) Variable cost
(d) Sunk cost
Answer:

Option (c)

Showing 11 to 20 out of 32 Questions
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