Question # 1

In the second stage of the law of variable of proportions the average product:

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Rises

Remains constant

Falls

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

Economics of scale are of two kinds

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temporary and permanent

internal and external

managerial and industrial

natural and artificial

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

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

The law of increasing returns is also known as:

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Law of increasing cost

Law of diminishing cost

Law of constant cost

None of the three

Economies of scale

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occur when increase in input less than proportionate increase in output

suggest that firm's marginal cost curve lies above its average cost curve

suggest that the firm's marginal cost curve is declining

occur when average cost is falling

When average product falls marginal product

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Rises

Also falls

Remain equal to average product

Does not change

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

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

Law of diminishing returns applies more in:

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Industry

Agriculture

Mining

Construction

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

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Zero

Positive

Negative

Rising

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

The law of variable proportions was presented by.

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David Ricords

Alfred Marshall

W.J.L. Ryan

Pareto

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

When total product rises marginal product.

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Remains the same

Falls

Also rises

None of the three

Laws of return apply to firms working in

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perfect competition

monopoly

small firm

all kinds of market situations

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

Which one will determine scale of production .

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Financial resources

Production techniques

Extant of the market

All the above

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

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