Quiz on Theory of Production and Cost

#1. Which of the following is considered production in Economics?

#2. Identify the correct statement

#3. Which of the following is not a characteristic of land?

#4. Which of the following statements is true?

#5. In the production of wheat, all of the following are variable factors that are used by the farmer except

#6. The marginal product of a variable input is best described as

#7. Diminishing marginal returns implies:

#8. The short run, as economists use the phrase is characterized by

#9. The marginal average, and total product curves encountered by the firm producing in the short run exhibit all of the following relationships except:

#10. To economists, the main difference between the short run and the long run is that:

#11. Which of the following is the best definition of “production function”?

#12. The “law of diminishing returns” applies to:

#13. Diminishing returns occur:

#14. What is the total output when 2 hours of labour are employed?( as per info given on pg no 3.45)

#15. What is the marginal product of the third hour of labour?pg no 3.45 qno 15

#16. What is the average product of the first three hours of labour? pg no 3.45 qno 16

#17. Which cost increases continuously with the increase in production?

#18. Which of the following cost curves is never ‘U’ shaped?

#19. Total cost in the short run is classified into fixed costs and variable costs. Which one of the following is a variable cost?

#20. In the short run, when the output of a firm increases, its average fixed cost:

#21. Which one of the following is also known as planning curve?

#22. If a firm moves from one point on a production isoquant to another, which of the following will not happen

#23. With which of the following is the concept of marginal cost closely related?

#24. Which of the following statements is correct?

#25. Which of the following is an example of “explicit cost”?

#26. Which of the following is an example of an “implicit cost”?

#27. The average fixed cost of 2 units of output is : as per info given on pgno 3.47 qno 27

#28. The marginal cost of the sixth unit of output is pg no 3.47 qno 28

#29. Diminishing marginal returns start to occur between units: pg no 3.47 qno 29

#30. Marginal cost is defined as:

#31. Which of the following is true of the relationship between the marginal cost function and the average cost function?

#32. Which of the following statements is true of the relationship among the average cost functions?

#33. Which of the following is not a determinant of the firm’s cost function?

#34. Which of the following statements is correct concerning the relationships among the firm’s cost functions?

#35. Suppose output increases in the short run. Total cost will:

#36. Which of the following statements concerning the long-run average cost curve is false?

#37. The negatively-sloped (i.e. falling) part of the long-run average total cost curve is due to which of the following?

#38. The positively sloped (i.e. rising) part of the long run average total cost curve is due to which of the following?

#39. A firm’s average total cost is ` 300 at 5 units of output and ` 320 at 6 units of output. The marginal cost of producing the 6th unit is :

#40. A firm producing 7 units of output has an average total cost of ` 150 and has to pay ` 350 to its fixed factors of production whether it produces or not. How much of the average total cost is made up of variable costs?

#41. A firm has a variable cost of ` 1000 at 5 units of output. If fixed costs are ` 400, what will be the average total cost at 5 units of output?

#42. A firm’s average fixed cost is ` 20 at 6 units of output. What will it be at 4 units of output?

#43. Which of the following statements is true?

#44. Which of the following is a function of an entrepreneur?

#45. In describing a given production technology, the short run is best described as lasting:

#46. If decreasing returns to scale are present, then if all inputs are increased by 10% then:

#47. The production function is a relationship between a given combination of inputs and:

#48. If the marginal product of labour is below the average product of labour, it must be true that:

#49. The average product of labour is maximized when marginal product of labour:

#50. The law of variable proportions is drawn under all of the assumptions mentioned below except the assumption that:

#51. What is a production function?

#52. Laws of production does not include ……

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