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1.

Identify the fixed factor in short run:A. labourB. raw materialC. landD. none of these

Answer» Correct Answer - C
Discussion
2.

When MP is more than APA. AP risesB. AP fallsC. AP remains constantD. none of these

Answer» Correct Answer - A
Discussion
3.

When TP curve is upward sloping and convex to X axis, MP curve is :A. downward slopingB. upward slopingC. touches X axisD. None of these

Answer» Correct Answer - B
Discussion
4.

Production function refers to functional relationship between inputs and ________.A. costB. outputC. revenueD. profit.

Answer» Correct Answer - B
Discussion
5.

Total product falls when MPA. falls positivelyB. risesC. is zeroD. is negative

Answer» Correct Answer - D
Discussion
6.

When TP increases at increasing rate, MPA. fallsB. risesC. remains constantD. all of these

Answer» Correct Answer - B
Discussion
7.

The time period in which production can be increased by increasing the quantity of variable factor onlyA. very short periodB. long periodC. short periodD. none of these

Answer» Correct Answer - C
Discussion
8.

So long as Average product is increasing:A. Marginal product is fallingB. Marginal product is risingC. Marginal product is greater than average productD. Marginal product is smaller than average product

Answer» Correct Answer - C
Discussion
9.

(a)What is the relation between average production and marginal production ? (b)What should be an ideal measure to determine wage rate of labour in a competitive economy

Answer» (a) (i) AP rises as long as MP`gt`AP.
(ii) When MP is equal to AP, AP is at its maximum and constant.
(iii) When MP is less than AP, AP falls.
(b) In a competitive economy, when we need to minimise cost of production and improve overall efficiency, wage rate should be determined on the basis of work efficiency of an individual which ultimately can be measured by marginal production.
Discussion
10.

Let the production function of a firm be `Q=5L^(1//2)K^(1//2)` . Find the maximum possible output that the firm can produce with 100 units of L and 100 units of K.

Answer» Given : `Q=5L^(1//2)K^(1//2) ` and L=10 units , K=100 units .
Putting the values of L and K in the given production function, we get,
`Q=5(100)^(1//2)(100)^(1//2)`
i.e., `Q=5sqrt100.sqrt100`
Q=500 units.
`therefore` Maximum output =500 units .
Discussion