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THEORY OF PRODUCTION AND COST IN ECONOMICS PDF MCQ’s: PRODUCTION FUNCTION FOR ICSE BOARD , ECONOMICS, CONCEPT OF PRODUCTION AND PRODUCTION FUNCTION FOR ICSE BOARD ECONOMICS Objective questions for ICSE Board, CONCEPT OF PRODUCTION AND PRODUCTION ICSE MCQ FOR ECONOMICS , CONCEPT OF PRODUCTION AND PRODUCTION Mock Test for Class ICSE Board.
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Table of Contents
MCQ ON PRODUCTION AND COST
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(a) Cost of input
(b) Cost of output
(c) Physical input to physical output
(d) Wages of profit
2.A production function is an expression of _ relation between inputs and outputs.
(a) monetary
(b) economic
(c) quantitative
(d) qualitative
3.A short run production function is one in which-
(a) at least one factor is fixed
(b) all factors are fixed
(c) all factors are variable
(d) at least one factor is variable
4.Technically efficient combinations of inputs of those which-
(a) minimizes wastage
(b) maximizes profits
(c) minimises cost
(d) maximises reve¬nue
5.In the short period there is no change in factors.
(a) fixed
(b) variable
(c) human
(d) physical
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6.In the period all factors are variable.
(a) short
(b) long
(c) market
(d) secular
7.In its original for Cobb-Douglas production function applies to-
(a) individual manufacturing firm
(b) individual firm
(c) whole of manufacturing in US
(d) None of the above
8.Cobb-Dauglas production function revealed that the increase in the manufacturing production was contributed by labour and capital respectively by-
(a) 3/4 th and l/4 th
(b) l/4 th and 3/4 th
(c) 2/3 rd and l/3 rd
(d) None of the above
9.Cobb-Douglas production-
(a) is linear
(b) is homogeneous
(c) shows constant returns to scale
(d) all the above
10.Cobb-Douglas production function exhibits returns to scale.
(a) increasing
(b) diminishing
(c) constant
(d) negative
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11.The above equations shows that-
(a) One factor is fixed and another variable
(b) Both factors are fixed
(c) Both factors are variable
(d) Both factors are semi-variable
12.The main difference between the short period/ run and the long period/run is that –
(a) in the short period all inputs are fixed, while in the long period all inputs are variable.
(b) in the short run at least one input is fixed
(c) in the short run firm varies the quantities of all inputs
(d) in the long run, the firm uses the existing plant capacity
13.The law of variable proportions is a law of production which takes place in the-
(a) market period
(b) short run
(c) long run
(d) very long period
- All but one are the assumptions of the law of variable proportions. Which one is not?
(a) There is only one factor which is variable
(b) All units of variable factor are homogeneous
(c) State of technology remains constant
(d) Applies in long run - When there is a fixed factor and a variable factor, then the law would be-
(a) law of increasing returns to scale
(b) law of constant returns to scale
(c) law of decreasing returns to scale
(d) law of variable proportions
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16.The total quantity of goods and services produced by a firm with the given inputs during a specified period of time is called-
(a) Total Product
(b) Average Product
(c) Marginal Product
(d) Labour Product
17.The amount of output produced per unit of variable factor employed is called-
(a) Total Product
(b) Average Product
(c) Marginal Product
(d) Labour Product
18.The change in TP resulting from the employment of an additional unit of a variable factor is called-
(a) Total Product
(b) Marginal Product
(c) Average Product
(d) All the above
19.The average product of a variable input can be described as-
(a) total product divided by the number of units of variable input
(b) additional output resulting from employment of additional unit of variable factor
(c) the total quantity of goods produced with all inputs
(d) None of the above
20.TP of variable factor is –
(a) only i
(b) only i and iii
(c) only ii
(d) only ii and iv
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21.Initially TP curve increases at an-
(a) increasing rate
(b) diminishing rate
(c) constant rate
(d) maximum rate
22.As more units of variable factor is employed it will-
(a) always increase the TP
(b) always decrease the TP
(c) not always increase the TP
(d) always result in constant TP
23.As long as TP is positive, AP is-
(a) negative
(b) constant
(c) positive
(d) falling
24.AP curve is-
(a) U-Shaped
(b) S-Shaped
(c) inverted U-Shaped
(d) inverted S-Shaped
25.MP curve is the slope of at each point.
(a) AP curve
(b) TP curve
(c) TR curve
(d) AR curve
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26.When TP is maximum, MP is –
(a) rising
(b) falling
(c) zero
(d) negative
27.When TP is falling, MP is –
(a) zero
(b) rising
(c) negative
(d) falling
28.MP curve is –
(a) U – shaped
(b) S- shaped
(c) inverted U – shaped
(d) inverted S – shaped
29.When TP is maximum, the slope of TP curve is –
(a) rising
(b) falling
(c) constant
(d) zero
30.TP is the area under the –
(a) AP curve
(b) AR curve
(c) MP curve
(d) MR curve
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31.MP is positive so long as TP is-
(a) increasing
(b) decreasing
(c) maximum
(d) negativ
32.When TP is rising-
(a) AP and MP are rising
(b) AP and MP are falling
(c) AP and MP may be either rising or falling
(d) Only MP is either rising or falling
- When MP is negative-
(a) TP and AP are falling
(b) TP and AP are rising
(c) TP and AP are constant
(d) Only TP is falling
34.When MP is at a maximum-
(a) AP = MP and TP is rising
(b) AP < MP and TP is rising (c) AP > MP and TP is rising .
(d) AP and TP are falling
35.If MP goes on increasing, it should be understood that law of _ is applying.
(a) increasing returns
(b) decreasing returns
(c) constant returns
(d) diminishing returns
36.If MP goes on decreasing it should be understood that law of _ is in operation.
(a) decreasing cost
(b) constant cost
(c) average cost
(d) increasing cost
37.When MP is falling, TP will increase at the rate.
(a) constant
(b) increasing
(c) diminishing
(d) normal
38.When average product is maximum, marginal product is equal to-
(a) total product
(b) zero
(c) one
(d) average product
39.MP curve cuts AP curve from-
(a) its top
(b) below
(c) both ‘a’ and ‘b’
(d) neither ‘a’ nor ‘b’
40.The marginal product is maximum at the .
(a) equilibrium point
(b) inflection point
(c) focal point
(d) optimum point
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41.The stage of production where the marginal product is greater than the average product is-.
(a) stage of increasing returns
(b) stage of diminishing returns
(c) stage of negative returns
(d) stage of constant returns
42.Which of the following statements reveal the diminishing returns?
(a) The MP of a factor is constant
(b) The MP of a factor is positive and rising
(c) The MP of a factor is falling and negative
(d) The MP of a factor is positive but falling
43.The MP curve is above the AP curve when the average product-
(a) is constant
(b) is falling
(c) is increasing
(d) is negative
44.87. The actual stage of production under the law of variable proportions is-
(a) stage of increasing returns
(b) stage of diminishing returns
(c) stage of negative returns
(d) stage of either increasing or diminishing returns
45.Reason for rise in both AP and MP curves is-
(a) under utilization of the fixed factor
(b) under utilization of the variable factor
(c) over utilization of the fixed factor
(d) over utilization of the variable factor
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46.Reason for fall in both AP and MP curves is-
(a) under utilization of the fixed factor
(b) over utilization of the fixed factor
(c) under utilization of the variable factor
(d) full utilization of the variable factor
47.When AP and MP curves are rising, MP curve rises-
(a) at a faster rate
(b) at a lower rate
(c) at normal rate
(d) at constant rate
48.When AP and MP curves are falling, MP curve falls-
(a) at a faster rate
(b) at a lower rate
(c) at normal rate
(d) at constant rate
49.When AP and MP curves are rising, AP curve _
(a) lies above the MP curve
(b) lies below the MP curve
(c) co-inside with the MP curve
(d) none of the above
50.The reason for increasing returns to factor is-
(a) Indivisibility of fixed factor
(b) Division of labour
(c) Specialisation
(d) All the above
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51.When the ideal factor ratio is violated in short run-
(a) diminishing returns to a factor set in
(b) MP of the variable factor starts falling
(c) TP increases at a diminishing rate
(d) All the above
52.AP increases so long as-
(a) MP > AP
(b) MP < AP
(c) MP = AP
(d) MP is zero
53.AP may continue to even when MP starts declining.
(a) rise
(b) fall
(c) remain constant
(d) fluctuate
54.MP curve cuts AP curve from its top, this means-
(a) MP < AP (b) MP > AP
(c) MP is rising
(d) MP is zero
55.Increasing MP implies TP is increasing at-
(a) increasing rate
(b) constant rate
(c) diminishing rate
(d) fluctuating rate
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56.MP of labour becoming negative implies-
(a) excessive employment
(b) disguised unemployment
(c) over exploitation of the fixed factor
(d) all the above
57.TP starts declining only when-
(a) MP is rising
(b) MP is falling
(c) MP is negative
(d) MP is constant
58.MP of the variable factor may be zero or negative, but AP continue to be-
(a) constant
(b) positive
(c) negative
(d) zero
59.AP decreases when-
(a) MP = AP
(b) MP > AP
(c) MP < AP
(d) None of the
Use the following information of answer questions 60-62
60.In the above equations the fixed factor is-
(a) Labour
(b) Capital
(c) Output
(d) both ‘a’ & ‘b’
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61.The MP of variable factor is-
(a) 4
(b) 5
(c) 6
(d) 7
62.In the equation (i) the AP of the variable factor is-
(a) 12 units
(b) 14
(c) 10
(d) 16
Use the following data to answer questions 63-64
TP is Zero level of employment
63.The total product when 5 units of labour are employed is-
(a) 60
(b) 76
(c) 90
(d) 96
64.The average product of 3rd unit of labour is-
(a) 21
(b) 20
(c) 19
(d) 18
Use the following data to answer questions 65-66
65.The total product of 3 units of labour is-
(a) 30
(b) 50
(c) 90
(d) 120
66.The marginal product of 5th unit of labour is-
(a) 10
(b) 20
(c) 30
(d) 40
Use the following data to answer questions 67-69
67.What is the total product when 2 hours of labour are employed?
(a) 160
(b) 200
(c) 360
(d) 540
68.What is the average product of the first 2 hours
(a) 250
(b) 260
(c) 270
(d) 280
69.What is the marginal product of the 3rd hour of labour?
(a) 160
(b) 180
(c) 120
(d) 200
70.Find the odd one out-
(a) law of diminishing returns to factor
(b) law of returns to scale
(c) cost function
(d) production function
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71.The production process described below exhibits
(a) increasing marginal product of labour
(b) increasing returns to scale
(c) diminishing marginal product of labour
(d) constant marginal product of labour
72.Diminishing marginal returns for the first four doses of inputs when all factors of production are increased in the same proportion is revealed by the total product sequence
(a) 50, 50, 50, 50
(b) 50, 100, 150, 200
(c) 50, 90, 120, 140
(d) 50, 110, 180, 260
73.The behaviour of output in response to a change in the scale is studied in the-
(a) Market Period
(b) Short Period
(c) Long Period
(d) Very Short Period
74.In the theory of production the long runs is defined as the period of time in which-
(a) All factors can be varied
(b) No factors can be varied
(c) Some factors are fixed but other can be varied.
(d) None of these
75.If all inputs are increased in the same proportion, then it is a case of-
(i) Short run production function
(ii) Long run production function
(iii) Laws of Variable Proportions
(iv) Laws of Returns to Scale
(a) i and ii only
(b) ii and iii only
(c) i and iv only
(d) ii and iv only
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76.In the long run-
(a) all inputs are fixed
(b) one input is fixed and one input is variable
(c) all inputs are variable
(d) two inputs are variable and one input is fixed
77.Law of increasing returns to scale will apply if-
(a) economies exceed the diseconomies
(b) economies and diseconomies are equal
(c) diseconomies exceed the economies
(d) in all the above situations
78.Internal economies accrue when-
(a) an industry develops
(b) an economy grows
(c) foreign trade develops
(d) a firm expands production in long run
79.External economies accrue when-
(a) a firm expands
(b) an individual progress
(c) an industry expand
(d) trade expands
80.If we have constant returns to scale and we increase both labour and capital by 10% output will also increase by-
(a) 20%
(b) 30%
(c) 10%
(d) 5%
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81.Find the odd one out-
(a) All factors are variable
(b) A firm can experience returns to scale
(c) Management can be reorganized
(d) Law of variable proportions
82.Economies of scale means-
(a) reduction in per unit cost of production
(b) reduction in per unit cost of distribution
(c) addition to the per unit cost of production
(d) reduction in the total cost of production
83.Linear Homogeneous Production Function is-
(a) Increasing Returns to Scale
(b) Constant Returns to Scale
(c) Diminishing Returns to Scale
(d) Negative Returns to Scale .
84.Internal economies relate to
(a) Marketing economies
(b) Financial economies
(c) Managerial economies
(d) All the above
85.In which of the following cases there is less than proportionate increase in output when all factors are increase-
(a) Constant returns to scale
(b) Diminishing returns to scale
(c) Increasing returns to scale
(d) Increasing as well as diminishing returns to scale
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| 1.C 2. C 3. A 4. C 5. A 6. B 7. C 8. A 9. D 10. C | 11.A 12. B 13. B 14. D 15. D 16. A 17. B 18. B 19. A 20. B | 21.A 22. C 23. C 24. C 25. B 26. C 27. C 28. C 29. D 30. C | 31.A 32. C 33. A 34. B 35. A 36. D 37. C 38. D 39. A 40. B | 41.A 42. D 43. C 44. B 45. A 46. B 47. A 48. A 49. B 50. D | 51.D 52. A 53. A 54. B 55. A 56. D 57. C 58. B 59. C 60. B | 61.B 62. A 63. C 64. B 65. D 66. A 67. D 68. C 69. B 70. C | 71.A 72. C 73. C 74. A 75. D 76. C 77. A 78. D 79. C 80. C | 81.D 82. A 83. B 84. D 85. B |
ALSO VISIT :CBSE SAMPLE PAPER ECONOMICS CLASS 12 TERM 2
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