In production function, production is a function of:
  • Price
  • Factors of Production
  • Total Expenditure
  • None of these
The basic reason of operating the Law of Diminishing Returns is:
  • Scarcity of Factors
  • Imperfect Substitution between Factors
  • Both (a) and (b)
  • None of the above
Which of the following explains the short-run production function ?
  • Law of Demand
  • Law of Variable Proportion
  • Returns to Scale
  • Elasticity of Demand
Long-run production function is related to:
  • Law of Demand
  • Law of Increasing Returns
  • Laws of Returns to Scale
  • Elasticity of Demand
In which stage of production a rational producer likes to operate in shot-run production ?
  • First Stage
  • Second Stage
  • Third Stage
  • None of these
Law of variable proportion explains three stages of production. In the first stage of production:
  • Both MP and AP rise
  • MP rises
  • AP Falls
  • MP is zero
At which time all the factors of production may be changed ?
  • Short run
  • Long run
  • Very Long run
  • All the three
Which factors among following we find in short-run production process ?
  • Fixed Factors
  • Variable Factors
  • Both (a) and (b)
  • None of these
The cycle which increases first and after being constant starts to reduce is called :
  • APP
  • MPP
  • TPP
  • All of these
Which of the following is a saurce of production ?
  • Land
  • Labour
  • Capital
  • All of these
Law of variable proportion is related to :
  • Both short-run and long run
  • Long-run
  • Short-run
  • Very Long-run
An active factor of production is:
  • Capital
  • Labour
  • Land
  • None of these
If all the factors of production are increased by same proportion and as a result output increases by a greater proportion than it is called :
  • Constant returns to scale
  • Decreasing returns to scale
  • All of these
  • None of these
Which of the following is included in money cost ?
  • Normal Profit
  • Explicit Cost
  • Implicit Cost
  • All of these
Which of the following is not fixed cost ?
  • Insurance Premium
  • Interest
  • Cost of Raw Material
  • Rent of the Factory
With the increase in production the difference between total cost and total fixed cost:
  • Remains Constant
  • Increases
  • Decreases
  • Both Increases or Decreases
Changes in production quantity affect:
  • Both Fixed and Variable Cost
  • Only Variable Cost
  • Only Fixed Cost
  • None of the above
What happens when production is shut down ?
  • Fixed Cost Increases
  • Variable Costs Decline
  • Variable Costs become zero
  • Fixed Costs become zero
The alternative name of opportunity cost is:
  • Economic Cost
  • Equilibrium Price
  • Marginal Cost
  • Average Cost
When average cost is decreasing what status marginal cost has as compared to average cost ?
  • MC > AC
  • MC = AC
  • MC ≤ AC
  • MC ≠ AC
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