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WorksheetsProduction Revision Quiz 1
Total questions: 40
Worksheet time: 20mins
A large firm may experience diseconomies of scale if there is
difficulty in coordinating decisions
division of labour in production
employment of more specialists
decrease in the cost of production
Increase return to scale suggests that
a firm can make more profit by reducing output
a firm can make more profit by increasing output
as the producer reduces the quantity of raw materials used, the marginal product will double
as the producer increases the quantity of raw materials used, the marginal product will fall
Which of the following are intermediate products?
cement and steel
Furniture and shirt
Handkerchiefs and shoes
Table and door
When an increase in input leads to a more than a proportionate increase in output, there is
decreasing returns to scale
increase in marginal product
increase returns to scale
constant returns to scale
The short-run in production is the time period when
techniques of production can easily be changed
all factors of production are variable
at least a factor is fixed while others are variable
variable factors cannot be changed
Which of the following is not emphasized in the production possibility curve?
scarcity of resources
economic development
inefficiency in the use of resources
unemployment of labour
The organization of productive factors is the responsibility of the
management
entrepreneur
production manager
labour union
“The larger a firm, the lower its cost of production”. This statement explains the
law of diminishing returns
concept of economics of scale
law of comparative cost advantage
theory of division of labour
In the long run, a firm must shut down if its average revenue is
greater than average cost
less than average variable cost
equal to the minimum average variable cost
equal to the average cost
The opportunity cost of a worker going to the university is
tuition, fees and books
boarding and lodging
the wages given up to attend university
transportation and entertainment
Which of the following items is not an example of circulating capital?
raw material
money
fuel
machinery
When a firm is enjoying internal economies of scale, it’s
total cost of production is increasing as output increases
average fixed cost is rising continuously
average cost of production decreases as output increases
average revenue and marginal revenue are decreasing
The specialization of labour enhances production because people
can concentrate on all goods they can produce better
can efficiently produce their own needs
can save time and produce more
become experts in all areas of production
Which of the following cannot be classified as land in economics?
bauxite deposit in the ground
a lake used for irrigation
a bulldozer for clearing farmland
grazing field for cattle
An entrepreneur is encouraged to adopt division of labour in production because it
provides more employment opportunities
leads to increased output and lower cost of production
brings about equal cost and employment opportunities
leads to increased cost of production and lower output
The necessary condition for a firm to be in equilibrium is that marginal revenue is
greater than marginal cost
equal to marginal cost
less than marginal revenue
equal to average cost
Which of the following will encourage capital intensive farming?
encouraging communal system of land ownership
adopting policies that will encourage rural-urban migration
provision of subsidies on equipment
restrictive lending policies by banks
Which of the following cannot be described as land?
forest
diamond
roads
crude oil
Which of the following is not true about land
the supply is fixed
land is mobile
it is subject to diminishing returns
land is heterogenous
An outward shift of the production possibility curve shows that
production is shifting to the right
resources are underutilized
economic growth has taken place
factors of production are moving outward
The law of diminishing returns relates to
total utility
average utility
total product
marginal product
By adding all the marginal products at each level of employment of the variable input, we obtain the value equal to
average product
total product
average variable cost
total cost
Total cost is obtained by
adding up the marginal cost at each level
dividing the total cost by output at each level
adding up the average variable cost at each level
adding up the average variable cost and total fixed cost
In the long-run, factors of production are considered to be
at maximum
fixed
variable
increasing
An agricultural production process which uses more machinery relative to labour is referred to as
large scale farming
capital intensive farming
commercial farming
labour intensive farming
Which of the following will enhance productivity in an economy?
the use of obsolete capital
technological change
expansion of land under cultivation
an increase in the labour force
When the marginal product is negative, the total product will be
constant
at a maximum
increasing
decreasing
Physical productivity is affected by all the underlisted factors except the
state of technology
quantity of inputs
quality of inputs
price of output
The main advantage of large scale production is that
unit cost of production falls
decision making is quick
worker-management relationship is improved
the quality of the product increases
Points outside a production possibility curve indicate
unattainable production levels
attainable production levels
inefficient but attainable production levels
optimum production levels
Why is the law of diminishing returns a short-run phenomenon?
all inputs are fixed
all inputs are variable
some outputs are variable
some inputs are variable
In the firm’s production process, marginal cost
falls continuously throughout
falls and later rises
remains unchangeable throughout
rises and later falls
If a firm’s price is less than average cost but more than average variable cost, the firm is covering
all of its fixed cost and variable cost
all of its fixed cost and part of variable cost
all of its variable cost and part of fixed cost
part of its fixed cost and part of variable cost
The factor of production which takes the initiative in combining resources for production is known as
capital
land
entrepreneur
labour
The type of production that involves the tapping and harnessing of natural resources is
primary production
secondary production
tertiary production
industrial protection
The resources used in production are called
variable inputs
factors of production
capital for production
fixed inputs
The production strategy used in an overpopulated country is
import substitution
capital intensive
labour intensive
first come first employed
Greater inter-dependence among workers in production is associated with
utility
manufacturing
division of labour
factory workers
The relationship between Marginal Product (MP) and Average Product (AP) is such that they are equal when
Average Product is maximum
Average Product is minimum
Marginal Product is maximum
Marginal Product is increasing
A society that operates below its Production Possibility Curve is using its productive resources
optimally
efficiently
inefficiently
maximally
