Question # 1

When business expands beyond its optimum level what type of economics will it be getting.

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Diseconomies

Internal economies

External economies

Maanagerial economics

Laws of return apply to firms working in

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perfect competition

monopoly

small firm

all kinds of market situations

The concept of internal and external economics was given by.

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Adam Smith

Robbins

J.M.Keynes

Alfred Marshall

Law of diminishing returns applies more in:

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Industry

Agriculture

Mining

Construction

When a firm using a fixed amount of land and capital takes on more workers, it finds that marginal product(MP) of labour falls but the average product(AP) of labour rises. This can be explained by the factors that

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MP of labour is grater than AP of labour

additional workers are more efficient

MP and AP are equal

AP is maximum

Which one is the third stage of production under law of variable proportions

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Decreasing average returns

Increasing average return

Negative marginal return

Increasing marginal return

When diseconomies of scale outweigh economies of scale the

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long run AC curve rises

marginal cost falls

long run ATC curve falls

AVC falls

If in a production process, all inputs are increased by 10% and output increase by less than 10%, then it is called

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economies of scale

diseconomies of scale

diminishing marginal returns

negative economies

In production of goods, negative returns in the short run imply that

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average product is negative

total product is negative

marginal product is negative

marginal cost is falling

Economics of scale are of two kinds

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temporary and permanent

internal and external

managerial and industrial

natural and artificial

Commercial economics are a pat of:

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Internal economics

External economics

Economies of scale

None of the three

Internal economies of scale include

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risk-bearing economics

trade mark

managerial economies

a and c of above

during short period, diminishing returns may follow because

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quantity of labour is fixed

quality of labour is fixed

quantity of capital is fixed

quantity of any one factor is fixed

An important factor which promotes large scale production is:

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Extant of market

Revolutionary changes in social life

Culture and civilization

All the three

Marginal product curve intersects average product curve when AP curve is

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minimum

maximum

rising

falling

When total product rises marginal product.

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Remains the same

Falls

Also rises

None of the three

In law of diminishing returns at least one factor

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must be constant

must be owned by the firm

must be purchasable

must be efficient

When total product falls, marginal product is.

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Zero

Positive

Negative

Falling

The law of variable proportions was presented by.

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Jevens

Rayon

Hicks

Valentine

When average product falls marginal product

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Rises

Also falls

Remain equal to average product

Does not change

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