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This set of Introductory Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Introductory Economics 1 Set 1
Q1 | When individuals income falls (everything remain the same) his demand for a normalgood
- rises
- falls
- remains the same
- negative
Q2 | Cardinal utility analysis to consumer equilibrium was developed by
- marshall
- hicks and allen
- geremy bentham
- gossen
Q3 | MC at any level of output is given by
- slope of tc curve
- slope of tvc curve
- slope of either tc or tvc
- slope of tfc
Q4 | If a firm’s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which oneamong the following is the marginal cost of producing the 7th unit
- 46
- 2
- 36
- 42
Q5 | The cost that cannot be recovered once spent
- accounting cost
- fixed cost
- implicit cost
- sunk cost
Q6 | The saucer-type of modern Short run Average Variable Cost (SAVC) represents
- excess capacity
- managerial costs
- load factors
- reserve capacity
Q7 | The Long run Average Cost curve (LAC) in modern cost theory is roughly
- u shaped
- saucer shaped
- l shaped
- rectangular hyperbola
Q8 | Under increasing returns to scale, which of the following is the nature of the long runaverage cost curve?
- downward sloping
- upward rising
- parallel to output axis
- identical to short run average cost curve
Q9 | Which of the following has a U shape?
- average fixed cost curve
- total cost curve
- average variable cost curve
- total variable cost curve
Q10 | AFC curve will always be
- rectangular hyperbola
- u shaped
- horizontal
- downward sloping
Q11 | Implicit cost of a factor of production is determined by its
- sunk cost
- variable cost
- fixed cost
- opportunity cost
Q12 | Economic cost include both
- explicit cost and implicit cost
- fixed cost and variable cost
- explicit cost and prime cost
- money cost and sunk cost
Q13 | The U shape of MC curve reflects
- economies of scale
- law of increasing returns
- reserve capacity
- law of variable proportion
Q14 | Envelope curve is
- long run marginal cost curve
- long run average cost curve
- total cost curve
- none of the above
Q15 | In long run, which factor of production is fixed?
- labour
- capital
- building
- none of the above
Q16 | The U shape of the average total cost curve reflects
- ldmu
- the law of variable proportions
- consumer’s surplus
- reserve capacity
Q17 | The total fixed cost is a
- horizontal straight line
- vertical
- hyperbola
- u shaped
Q18 | When AC minimum in short run
- ac < mc
- ac > mc
- ac = mc
- any of above is possible
Q19 | The shape of TVC and TC are
- rectangular hyperbola
- inverse ‘s’ shape
- horizontal straight line
- l shaped
Q20 | The cost expressed not in terms of money but in terms of efforts of workers undergonefor making the commodity
- opportunity cost
- real cost
- sacrifice cost
- implicit cost
Q21 | The MC curve cuts the AC curve at
- the maximum point
- the initial point
- the minimum point
- any point
Q22 | The minimum point of ATC is at.............. position of the minimum point of AVC
- right
- left
- same
- all of above can be
Q23 | If the long run cost curve shifts down wards it is an indication of
- technological progress
- lower factor prices
- both of these
- reserve capacity
Q24 | The U shape of the LAC reflects
- law of variable proportions
- laws of returns to scale
- reserve capacity
- none of these
Q25 | A production possibility curve is concave to the point of origin because of
- increasing marginal rate of transformation (mrt)
- increasing marginal opportunity cost (moc)
- both of the above
- decreasing marginal rate of transformation