Basics Of Economics Set 2
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This set of Basics of Economics Multiple Choice Questions & Answers (MCQs) focuses on Basics Of Economics Set 2
Q1 | In short-run
- all inputs are fixed
- all inputs are variable
- some inputs are fixed and some are variable
- none of the above
Q2 | In long-run
- all inputs are fixed
- all inputs are variable
- some inputs are fixed and some are variable
- none of the above
Q3 | The variable cost of a firm vary in direct proportion to the
- volume of its output
- extent of its profits
- volume of its sale
- all of the above
Q4 | Law of variable proportions is concerned with
- long-run production function
- laws of returns to scale
- short-run production function
- none of the above
Q5 | The ‘point of inflection’ come in which stage of the law of variable proportions
- stage i
- stage ii
- stage iii
- none of the above
Q6 | A rational producer will select his level of production in which stage ofthe law of variable proportions
- stage i
- stage ii
- stage iii
- either stage i or stage ii
Q7 | Total product reaches at maximum when
- mp is increasing
- mp is maximum
- mp = 0
- mp is negative
Q8 | Returns to scale refers to the production function where
- all factors are fixed
- some factors are fixed and others are variable
- all factors are variable
- none of the above
Q9 | In the case of diminishing returns to scale, a given proportionateincrease in all factors causes
- a more than proportionate increase in output
- an equal proportionate increase in output
- a less than proportionate increase in output
- none of the above
Q10 | Increasing returns to scale occurs due to
- division of labour
- specialization
- economies of scale
- all of the above
Q11 | The cause for diminishing returns to scale is:
- improper proportion of factors of production
- difficulty in the combination of certain factors
- excess combination of certain factors
- all of the above
Q12 | The solution to diminishing returns to scale is :
- technical progress
- expansion of resources
- proper combination or resources
- all of the above
Q13 | Which one of the following is not related to economies of scale:
- scope for division of labour and specialization
- scope for getting inputs at cheaper rates
- difficulty faces by the managers to coordinate the business
- scope for better storage facilities
Q14 | The law of Diminishing returns is applicable to:
- agriculture only
- industry only
- in short-run only
- universally
Q15 | labourers are employed the firm produces 136 units of output. Thenthe marginal product is ---
- 120
- 136
- 6
- 16
Q16 | Other things remaining the same, the quantity of a product demandedincreases with ------------ in price.
- increase
- decrease
- variation
- none of the above
Q17 | When total utility is maximum, marginal utility is:
- maximum
- one
- zero
- infinite
Q18 | For complementary goods, the cross elasticity of demand:
- positive
- negative
- zero
- none
Q19 | Relation between price of a commodity and demand for anothercommodity is measured by:
- price elasticity
- income elasticity
- cross elasticity
- elasticity of substitution
Q20 | When TU falls, MU is:
- rises
- zero
- positive
- negative
Q21 | Demand varies ------------- with price.
- directly
- positively
- inversely
- none of the above
Q22 | When Q = f (P), the elasticity coefficient is measured by:
- ∆q/∆p / p/q
- ∆p/∆q * q/p
- ∆q/∆p * p/q
- ∆p/∆q / q/p
Q23 | Income elasticity of demand for inferior good is:
- negative
- positive
- zero
- unity
Q24 | In the case of luxury goods, the income elasticity of demand will be:
- less than unity
- unity
- more than unity
- all the above
Q25 | Income elasticity is positive, but less than unity in the case of:
- necessity
- luxury
- inferior
- substitutes