Basics Of Economics Set 2 MCQs

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