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WorksheetsMix Eco chapter 3 (2)
Total questions: 66
Worksheet time: 33mins
Marginal output is rising itself means
per unit marginal cost is falling
Per unit marginal cost is rising
Per unit marginal cost is constant
None of above
in the first stage of law of variable proportion marginal product rises initially and then start falling. This means in the first stage marginal cost of output shall
Fall initially and then it will rise
rise initially and then it will fall
Rise continuously
Fall continuously
The shape of _________ curve will be exact opposite of marginal product curve
Average total cost
Average variable cost
Marginal cost curve
Total cost curve
The shape of _________ curve will be exact opposite of average product curve
Average total cost
Average variable cost
Marginal cost curve
Total cost curve
The shape of average fixed cost curve is
Negative slope
U shape
Linear shape
Positive slope
In the short run ________ remains constant and ___________ keeps falling (assume total output is rising)
total variable cost ; total fixed cost
total fixed cost ; total variable cost
Total fixed cost ; average fixed cost
Total variable cost ; average variable cost
Average total cost is determined by
Average fixed cost
Average variable cost
Both a & b
None
When output is 2 units, Average variable cost is Rs.20/unit and average fixed cost is Rs.40/unit. Find average total cost of 2 units
₹30
₹60
₹50
₹35
Find X & Y
X = 195 ; Y = 585
X = 60 ; Y = 540
X = 60 ; Y = 460
X = 60 ; Y = 377
The cost schedule is representative of (assume short run)
Law of increasing returns
Law of diminishing returns
Law of negative returns
Law of constant returns
The cost schedule is representative of
Law of increasing returns
Law of diminishing returns
Law of constant returns
Law of negative returns
The cost schedule is representative of
First stage of law of variable proportion
second stage of law of variable proportion
Shift from first stage to second stage of law of variable proportion
None
In the first stage of law of variable proportion average total cost _________
Falls
Rises
Either a or b
None
In the second stage of law of variable proportion average total cost _________
Falls
Rises
Either a or b
None
Suppose average variable cost is rising and average fixed cost is falling then the average total cost shall
Fall
Rise
may fall or rise
None
MC curve cuts average variable cost where MC is minimum
MC curve cuts average variable cost where average variable cost is minimum
The shape of marginal cost curve is exact opposite of the shape of marginal product curve
The shape of average variable cost curve is exact opposite of average product curve
Both a & b
None
The minimum point of marginal cost curve is indicative of point of inflexion
The point where MC = AVC is indicative of end of first stage of law of variable proportion
Both a & b
None
end of first stage of law of variable proportion
end of second stage of law of variable proportion
it’s just a mathematical possibility where MC is rising and AFC is falling there is possibility that they will intersect somewhere
Average variable cost is falling, average fixed cost is falling
Average variable cost is falling and average fixed cost is rising
Average variable cost is rising and average fixed cost is falling
None of above
The average total cost (AC) is falling as fall in AVC is greater than rise in AFC
The average total cost (AC) is falling as fall in AFC is greater than rise in AVC
The average total cost (AC) is rising as fall in AFC is less than rise in AVC
None of above
AFC is falling and AVC is rising
AFC is falling and AVC is falling
AFC is rising and AVC is falling
None
AC is falling due to fall in both AVC and AFC
AC is falling due to rise in AVC and fall in AFC
None
AFC is falling and AVC is also falling
AFC is falling and AVC is rising
AFC Is rising and AVC is also rising
None
AC is rising due to rise in AVC is less than fall in AFC
AC is rising due to rise in AVC is gretaer than fall in AFC
None
when marginal cost curve is below Average total cost (also known as average cost) is ________
Falling
Rising
Constant
None
when average total cost (also known as average cost) is falling, average variable cost is
Falling
Rising
Constant
either a or b
When average cost is falling, average fixed cost is
Falling
Rising
Constant
either a or b
When average cost is rising, average fixed cost is
Falling
Rising
Constant
either a or b
When average variable cost is rising, average cost is
Falling
Rising
Constant
either a or b
When average variable cost is falling, average cost is
Falling
Rising
Constant
either a or b
When marginal cost is above average cost, average cost is
Falling
Rising
Constant
either a or b
Marginal cost curve cuts average cost curve at the minimum of
MC
AVC
AC
AFC
Marginal cost curve cuts average variable cost curve at the minimum of
MC
AVC
AC
AFC
Which cost curve starts rising before any other costs curve
MC
AVC
AC
AFC
Optimum point refers to the point where
marginal cost is minimum
average total cost (average cost) is minimum
both a & b
none
Optimum output is _______
250 units
300 units
350 units
400 units
Average cost and marginal cost at optimum output is _______
₹ 10 & ₹ 60
₹ 60 & ₹ 45
₹ 45 & ₹ 45
₹ 60 & ₹ 60
Total cost at optimum point is
₹ 24,000
₹ 21,000
₹ 35,000
₹ 20,000
The two average cost curves relates to
Two different plant sizes having different production capacity
Two different plant sizes having identical production capacity
Two same plants giving different output
Two same plants giving same output
which plant is better suited for relatively higher output
Curve to the left
Curve to the right
Either a or b
None
to move from first AC (curve to the left) to the second AC (curve to the right) the firm needs to
employ additional quantity of labour
Employ additional quantity of fixed factor
Both a & b
None
movement from first AC curve to the second AC curve is possible in the
Short run
Long run
Both a & b
None
Which among the two cost curves will give lower per unit cost for 400 units of output
Curve to the left
Curve to the right
Both a & b
None
Shift from leftward Average cost curve to rightward average cost curve is indicative of
Law of Increasing returns
Law of diminishing returns
increasing returns to scale
None
Production of 700 units is possible on
Both the plants
First plant (i.e. plant to the left )
Second plant (i.e. plant to the right)
None
Production of 2,000 units is possible on
Both the plants
First plant (i.e. plant to the left )
Second plant (i.e. plant to the right)
None
If the firm wish to produce 1,500 units it should
Produce with first plant
Produce with second plant
New plant set up needs to erected
None
Bigger the plant lower the average cost, this is true
Always
As long as increasing returns to scale are available
As long as the firm is producing with latest technology
None
Which plant curve would give minimum average cost to produce 500 units
Plant 1
Plant 2
Plant 3
None
Which plant curve has lowest optimum point
Plant 1
Plant 2
Plant 3
None
3rd plant curve has _________ production capacity and relatively _________ average cost
Higher ; higher
higher ; lower
lower ; higher
None
Shift from plant 1 to plant 2 is indicative of
Increasing returns to scale
Decreeing returns to scale
Constant returns to scale
None
Shift from plant 2 to plant 3 is indicative of
Increasing returns to scale
Decreeing returns to scale
Constant returns to scale
None
The curve which encompasses all the three plant curves is
Short run average cost curve
Long run average cost curve
Medium run average cost curve
None
Optimum point of long run average cost curve is at
200 units
300 units
500 units
700 units
Long run average cost curve is made up of
Short run average cost curves
Independent curve not based upon short run cost curves
plant 1 curve, plant 2 curve and plant 3 curves are known as _________ whereas long run average cost curve is known as ________
Plant curve ; cost curve
Planning curve ; plant curve
Plant curve ; planning curve
Cost curve ; plant curve
plant 1 curve is tangent to the planning curve at its
Falling part
Rising part
Optimum point
None
plant 2 curve is tangent to the planning curve at its
Falling part
Rising part
Optimum point
None
plant 3 curve is tangent to the planning curve at its
Falling part
Rising part
Optimum point
None
Falling part of long run average cost is due to
Economies of scale
Diseconomies of scale
Either a or b
None
rising part of long run average cost is due to
Economies of scale
Diseconomies of scale
Either a or b
None
Rahul has invested ₹200,000 in his business, his wife was not in favour of doing business, she always felt that if the same amount of invested in the stock market it would have earned much more. What is the opportunity cost of capital invested into the business
profit earned from business
Profit that could have been earned had the amount invested in to the stock market
Rahul has invested ₹200,000 in his business, his wife was not in favour of doing business, she always felt that if the same amount of invested in the stock market it would have earned much more. What is the implicit cost of capital invested into the business
profit earned from business
Profit that could have been earned had the amount invested in to the stock market
All the cost considered in the short run / long run cost curves includes
Actual costs incurred on resources used in the business
Implicit cost of own resources used in the business
Both a & b
None
