| 1 |
Economics of scale are of two kinds |
- A. temporary and permanent
- B. internal and external
- C. managerial and industrial
- D. natural and artificial
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| 2 |
Economies of scale |
- A. occur when increase in input less than proportionate increase in output
- B. suggest that firm's marginal cost curve lies above its average cost curve
- C. suggest that the firm's marginal cost curve is declining
- D. occur when average cost is falling
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| 3 |
If in a production process, all inputs are increased by 10% and output increase by less than 10%, then it is called |
- A. economies of scale
- B. diseconomies of scale
- C. diminishing marginal returns
- D. negative economies
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| 4 |
Internal economies of scale include |
- A. risk-bearing economics
- B. trade mark
- C. managerial economies
- D. a and c of above
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| 5 |
In law of diminishing returns at least one factor |
- A. must be constant
- B. must be owned by the firm
- C. must be purchasable
- D. must be efficient
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| 6 |
The law of variable proportions was presented by. |
- A. David Ricords
- B. Alfred Marshall
- C. W.J.L. Ryan
- D. Pareto
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| 7 |
The production function relates to |
- A. cost of output
- B. cost of input
- C. output to input
- D. demand to output
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| 8 |
Marginal product indicates rate of change of |
- A. total product
- B. average product
- C. variable product
- D. all of the above
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| 9 |
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 |
- A. MP of labour is grater than AP of labour
- B. additional workers are more efficient
- C. MP and AP are equal
- D. AP is maximum
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| 10 |
When average product falls marginal product |
- A. Rises
- B. Also falls
- C. Remain equal to average product
- D. Does not change
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