Question 1

In the case of diminishing returns to scale, a given proportionate increase in all factors causes

Accepted Answer

A) a more than proportionate increase in output 
B) an equal proportionate increase in output 
C) a less than proportionate increase in output 
D) none of the above 
A) a more than proportionate increase in output 
B) an equal proportionate increase in output 
C) a less than proportionate increase in output 
D) none of the above C

Question 2

Which one of the following is not related to economies of scale:

Accepted Answer

A) scope for division of labour and specialization 
B) scope for getting inputs at cheaper rates 
C) difficulty faces by the managers to coordinate the business 
D) scope for better storage facilities 
A) scope for division of labour and specialization 
B) scope for getting inputs at cheaper rates 
C) difficulty faces by the managers to coordinate the business 
D) scope for better storage facilities C

Question 3

Increasing returns to scale occurs due to

Accepted Answer

A) division of labour 
B) specialization 
C) economies of scale 
D) all of the above 
A) division of labour 
B) specialization 
C) economies of scale 
D) all of the above D

Question 4

In the case of luxury goods, the income elasticity of demand will be:

Accepted Answer

A) less than unity 
B) unity 
C) more than unity 
D) all the above 
A) less than unity 
B) unity 
C) more than unity 
D) all the above

Question 5

In short-run

Accepted Answer

A) all inputs are fixed 
B) all inputs are variable 
C) some inputs are fixed and some are variable 
D) none of the above 
A) all inputs are fixed 
B) all inputs are variable 
C) some inputs are fixed and some are variable 
D) none of the above

Question 6

labourers are employed the firm produces 136 units of output. Then the marginal product is ---

Accepted Answer

A) 120 
B) 136 
C) 6 
D) 16 
A) 120 
B) 136 
C) 6 
D) 16

Question 7

A rational producer will select his level of production in which stage of the law of variable proportions

Accepted Answer

A) stage i 
B) stage ii 
C) stage iii 
D) either stage i or stage ii 
A) stage i 
B) stage ii 
C) stage iii 
D) either stage i or stage ii

Question 8

Relation between price of a commodity and demand for another commodity is measured by:

Accepted Answer

A) price elasticity 
B) income elasticity 
C) cross elasticity 
D) elasticity of substitution 
A) price elasticity 
B) income elasticity 
C) cross elasticity 
D) elasticity of substitution

Question 9

The 'point of inflection' come in which stage of the law of variable proportions

Accepted Answer

A) stage i 
B) stage ii 
C) stage iii 
D) none of the above 
A) stage i 
B) stage ii 
C) stage iii 
D) none of the above

Question 10

Other things remaining the same, the quantity of a product demanded increases with ------------ in price.

Accepted Answer

A) increase 
B) decrease 
C) variation 
D) none of the above 
A) increase 
B) decrease 
C) variation 
D) none of the above

Question 11

Total product reaches at maximum when

Accepted Answer

A) mp is increasing 
B) mp is maximum 
C) mp = 0 
D) mp is negative 
A) mp is increasing 
B) mp is maximum 
C) mp = 0 
D) mp is negative

Question 12

In long-run

Accepted Answer

A) all inputs are fixed 
B) all inputs are variable 
C) some inputs are fixed and some are variable 
D) none of the above 
A) all inputs are fixed 
B) all inputs are variable 
C) some inputs are fixed and some are variable 
D) none of the above

Question 13

The variable cost of a firm vary in direct proportion to the

Accepted Answer

A) volume of its output 
B) extent of its profits 
C) volume of its sale 
D) all of the above 
A) volume of its output 
B) extent of its profits 
C) volume of its sale 
D) all of the above

Question 14

Demand varies ------------- with price.

Accepted Answer

A) directly 
B) positively 
C) inversely 
D) none of the above 
A) directly 
B) positively 
C) inversely 
D) none of the above

Question 15

When Q = f (P), the elasticity coefficient is measured by:

Accepted Answer

A) ?q/?p / p/q 
B) ?p/?q * q/p 
C) ?q/?p * p/q 
D) ?p/?q / q/p 
A) ?q/?p / p/q 
B) ?p/?q * q/p 
C) ?q/?p * p/q 
D) ?p/?q / q/p

Question 16

Law of variable proportions is concerned with

Accepted Answer

A) long-run production function 
B) laws of returns to scale 
C) short-run production function 
D) none of the above 
A) long-run production function 
B) laws of returns to scale 
C) short-run production function 
D) none of the above

Question 17

The solution to diminishing returns to scale is :

Accepted Answer

A) technical progress 
B) expansion of resources 
C) proper combination or resources 
D) all of the above 
A) technical progress 
B) expansion of resources 
C) proper combination or resources 
D) all of the above

Question 18

Returns to scale refers to the production function where

Accepted Answer

A) all factors are fixed 
B) some factors are fixed and others are variable 
C) all factors are variable 
D) none of the above 
A) all factors are fixed 
B) some factors are fixed and others are variable 
C) all factors are variable 
D) none of the above

Question 19

Income elasticity is positive, but less than unity in the case of:

Accepted Answer

A) necessity 
B) luxury 
C) inferior 
D) substitutes 
A) necessity 
B) luxury 
C) inferior 
D) substitutes

Question 20

When TU falls, MU is:

Accepted Answer

A) rises 
B) zero 
C) positive 
D) negative 
A) rises 
B) zero 
C) positive 
D) negative

In the case of diminishing returns to scale, a given proportionate increase in all factors causes

Which one of the following is not related to economies of scale:

Increasing returns to scale occurs due to

In the case of luxury goods, the income elasticity of demand will be:

In short-run

labourers are employed the firm produces 136 units of output. Then the marginal product is ---

A rational producer will select his level of production in which stage of the law of variable proportions

Relation between price of a commodity and demand for another commodity is measured by:

The 'point of inflection' come in which stage of the law of variable proportions

Other things remaining the same, the quantity of a product demanded increases with ------------ in price.

Total product reaches at maximum when

In long-run

The variable cost of a firm vary in direct proportion to the

Demand varies ------------- with price.

When Q = f (P), the elasticity coefficient is measured by:

Law of variable proportions is concerned with

The solution to diminishing returns to scale is :

Returns to scale refers to the production function where

Income elasticity is positive, but less than unity in the case of:

When TU falls, MU is:

Economic Concepts and Terminologies

Demand and Elasticity

Economics and National Income Estimation

GDP, National Income, and Classical Economics

Economic Theory and Concepts

Economics and Keynesian Theory

Understanding Economic Concepts and Theories

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Exam 2: Production and Demand Theories

In the case of diminishing returns to scale, a given proportionate increase in all factors causes

Which one of the following is not related to economies of scale:

Increasing returns to scale occurs due to

In the case of luxury goods, the income elasticity of demand will be:

In short-run

labourers are employed the firm produces 136 units of output. Then the marginal product is ---

A rational producer will select his level of production in which stage of the law of variable proportions

Relation between price of a commodity and demand for another commodity is measured by:

The 'point of inflection' come in which stage of the law of variable proportions

Other things remaining the same, the quantity of a product demanded increases with ------------ in price.

Total product reaches at maximum when

In long-run

The variable cost of a firm vary in direct proportion to the

Demand varies ------------- with price.

When Q = f (P), the elasticity coefficient is measured by:

Law of variable proportions is concerned with

The solution to diminishing returns to scale is :

Returns to scale refers to the production function where

Income elasticity is positive, but less than unity in the case of:

When TU falls, MU is:

Economic Concepts and Terminologies

Demand and Elasticity

Economics and National Income Estimation

GDP, National Income, and Classical Economics

Economic Theory and Concepts

Economics and Keynesian Theory

Understanding Economic Concepts and Theories

Filters