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Plus Two Economics Chapter 3 – Online Practice Exam in English

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Chapter 3 – Production and Cost

Chapter 3

Multi-choice Practice Exam

Question

1) A set of all the combinations of the two inputs that yield the same level of output is

Hint

We get same level of output

Answers

Isoquant

PPC

Isocost line

Indifference Curve

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Question

2) Addition to the total product is called

Hint

Additional output from an extra unit of variable input.

Answers

AP (Average Product)

Total Product (TP)

Marginal Product (MP)

None of these

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Question

3) AC (average cost) is the sum of AFC (average fixed cost) and

Hint

How we get average cost.

Answers

TVC

AVC

TC

MC

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Question

4) The shape of AFC curve is

Hint

Think about the shape of AFC curve

Answers

‘ U ‘ shape.

Inverted ‘ U ‘ shape

Rectangular Hyperbola

‘ L ‘ shape

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Question

5) All inputs can be varied in the

Hint

Long run and Short run

Answers

Long run

Short run

Long run and Short run

None of the above

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Question

6) Which of the following cost will be zero when production is stopped ?

Hint

Different type of costs

Answers

AFC

Fixed cost

Variable cost

Total cost

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Question

7) If input is doubled and output become double, the production function is

Hint

Short run production

Answers

CRS (Constant Returns to Scale)

IRS (Increasing Return to Scale)

DRS (Decreasing Return to Scale)

None of the above

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Question

8) The relationship between input and output is called

Hint

Related with production

Answers

Utility function

Production function

Consumption function

Demand function

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Question

9) TP at 5th  unit of labour is 10 and TP at 6th unit of labour is 12, then MP is

Hint

Marginal Product

Answers

2

22

11

1

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Question

10) α + β = 1 in the Cobb-Douglas production function exhibits 

Hint

 Types of production under Cobb-Douglas production function

Answers

IRS

DRS

CRS

None of the above

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Question

11) Identify the shape of the following AFC curve

Hint

AFC curve from left to right

Answers

‘ L ‘ shape

‘ U ‘ Shape

Rectangular Hyperbola

None of the above

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Question

12) Slope of an isoquant is 

Hint

Feature of Isoquant

Answers

Marginal Cost

DMRS

MRS

DMRTS

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Question

13) ΔTC / ΔQ is

Hint

Different cost concepts

Answers

AC

FC

MC

AVC

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Question

14) When MP becomes zero, TP

Hint

Relation between TP and MP

Answers

Increases

Decreases

Become maximum

Becomes negative

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Question

15) All the following curves are ‘U’ shaped except

Hint

Shapes of cost curves

Answers

The AFC curve

The AVC curve

The TFC curve

The TVC curve

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Question

16) TFC = AFC x

Hint

Which of the following will you select to get TFC?

Answers

TVC

AVC

TFC

Q

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Question

17) When a firm increased the number of labour from 10 to 11, keeping the capital fixed the total product increased from 120 to 130. Which of the following is statement is correct in this regard ?

Hint

Related with marginal product

Answers

The total product fell

This is a long run production

The average product is rising

10 is the marginal product of an increased unit of labour

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Question

18) ∞ + β > 1 in the Cobb-Douglas production function exhibits

Hint

Cobb-Douglas production function

Answers

IRS

CRS

DRS

None of the above

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Question

19) Select the odd one

Answers

TVC

TFC

LAC

AFC

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Question

20)

Answers

Wages for own labour

Rent for own land

Interest for own capital

Energy cost

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Question

21)

Answers

LAC

DRS

IRS

CRS

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Question

22)

Answers

AFC

MRS

SMC

MPP

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True-False Question

Question 1

23) Average Product Curve is ‘ U ‘ shaped

Question 2

24) The minimum point of AVC lies at the right of the minimum point of AC

Question 3

25) As AC rises MC is greater than AC

Question 4

26) MC is undefined at zero level of output

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