MCQ on Production and Costs

MCQ on Production and Costs

1-The process by which inputs are transformed into ‘output’.

(A) Production

(B) productivity

(C) Manufacturing

(D) None of the above

 

2-Which of the following is not an input?

(A) steel

(B) aluminium

(C) rubber

(D) car

 

3-The difference between revenue and cost is called

(A) wage

(B) profit

(C) output

(D) none of the above

 

4-It is the technological knowledge that determines the maximum levels of output that can be produced using different combinations of inputs.

(A) productivity

(B) production function

(C) manufacturing

(D) none of the above

 

5-The inputs that a firm uses in the production process are called

(A) factors of production

(B) organs of production

(C) production inputs

(D) none of the above

 

6-Following is (are) factor(s) of production.

(A) labor

(B) capital

(C) both (A) and (B)

(D) none of the above

 

7-Which of the following is true?

(A) In the short run, at least one of the factor – labour or capital – cannot be varied

(B) In the long run, all factors of production can be varied

(C) both (A) and (B)

(D) None of the above

 

8-The relationship between the variable input and output, keeping all other inputs constant, is often referred to as ___ of the variable input.

(A) Total Product (TP)

(B) Average Product

(C) Marginal Product

(D) None of the above

 

9-___ of an input is defined as the change in output per unit of change in the input when all other inputs are held constant.

(A) Total Product (TP)

(B) Average Product

(C) Marginal Product

(D) None of the above

 

10-___ is defined as the output per unit of variable input.

(A) Total Product (TP)

(B) Average Product

(C) Marginal Product

(D) None of the above

 

11-Marginal Product =

(A) Output / Input

(B) Input / Output

(C) Change in output / Change in input

(D) Change in input / Change in output

 

12-Marginal product is undefined at ___ level of input employment.

(A) zero

(B) one

(C) two

(D) three

 

13-Law of variable proportions or the law of diminishing marginal product is the tendency of the Marginal Product to

(A) first increase and then fall

(B) first fall and then increase

(C) fall constantly

(D) increase constantly

 

14-An increase in the amount of one of the inputs keeping all other inputs constant results in

(A) decrease in output

(B) an increase in output

(C) consistency in output

(D) none of the above

 

15-When a proportional increase in all inputs results in an increase in output by the same proportion, the production function is said to display

(A) Decreasing Returns to Scale (DRS)

(B) Increasing Returns to Scale (IRS)

(C) Constant returns to scale (CRS)

(D) None of the above

 

ANSWERS:

1-(A), 2-(D), 3-(B), 4-(B), 5-(A), 6-(C), 7-(C), 8-(A), 9-(C), 10-(B), 11-(C), 12-(A), 13-(A), 14-(B), 15-(C)