Question # 1

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

Law of decreasing returns generates

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law of economic growth

law of increasing costs

law of variable costs

law of decreasing costs

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

Laws of return apply to firms working in

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perfect competition

monopoly

small firm

all kinds of market situations

Commercial economics are a pat of:

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Internal economics

External economics

Economies of scale

None of the three

Economics of scale are of two kinds

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temporary and permanent

internal and external

managerial and industrial

natural and artificial

Marginal product indicates rate of change of

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total product

average product

variable product

all of the above

Law of diminishing returns applies more in:

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Industry

Agriculture

Mining

Construction

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

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

When total product rises marginal product.

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Remains the same

Falls

Also rises

None of the three

The slopes of average and marginal products curves are always zero under:

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Law of increasing returns

Law of diminishing returns

Law of constant returns

Law of variable propoitions

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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David Ricords

Alfred Marshall

W.J.L. Ryan

Pareto

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 of the following is example of external economies of scale?

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Discount on purchases of raw materials

Technical progress leads to development of machines at low price

Hiring of specialized staff due to increase in scale of production

A firm starts producing by products

Which of the following saying describes diminishing marginal returns in the short run?

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When the cat is away, the mouse will play

Too many cooks spoil the broth

A rolling stone gathers no moss

A stitch in time saves nine

Marginal product curve intersects average product curve when AP curve is

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minimum

maximum

rising

falling

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

When total product (TP) reaches its maximum, Marginal product (MP) is_

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Zero

Positive

Negative

Rising

Economies and diseconomies of scale determine the shape of

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long run AC curve

short run AC

average fixed cost

none of the above

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