Question # 1

Marginal product indicates rate of change of

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total product

average product

variable product

all of the above

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

Commercial economics are a pat of:

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Internal economics

External economics

Economies of scale

None of the three

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

Marginal product curve intersects average product curve when AP curve is

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minimum

maximum

rising

falling

Internal economies of scale include

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risk-bearing economics

trade mark

managerial economies

a and c of above

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

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

The law of variable proportions was presented by.

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Jevens

Rayon

Hicks

Valentine

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

When MP curve cuts AP curve, the AP is at its.

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Lowest point

Highest point

Neither of the two

Eighter of the two

Laws of return apply to firms working in

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perfect competition

monopoly

small firm

all kinds of market situations

Economics of scale are of two kinds

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temporary and permanent

internal and external

managerial and industrial

natural and artificial

The maximum point of TP curve is at quantity of labour where

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Average physical product of labour is equal to 1

MPP of labour is at its maximum

curves of APP and MPP of labour intersect

MPP of labour is zero

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 average product falls marginal product

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Rises

Also falls

Remain equal to average product

Does not change

The government constructed a new water reservoir for the purpose of irrigation; this might be taken as

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increase in supply of capital

increase in supply of land

increase in supply of land and supply of capital

none of these

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

Law of diminishing returns is a universal law as:

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It does apply in all aspects of an economy.

Basically it applies in agriculture.

It is hard to check it.

It applies in industry as well

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

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