Tag: economics

Questions Related to economics

A has three children in his family, the probability of all the children being a girl child is _____

computer and ms office mathematical methods for economics economics

  1. $\dfrac{1}{2}$

  2. $\dfrac{1}{3}$

  3. $\dfrac{1}{8}$

  4. $\dfrac{3}{8}$

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Correct Option: C

Which of these can be described as implicit cost of production?

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. National rent of own office building

  2. Payment of wages to workmens

  3. Normal profit on capital employed

  4. Interest on loan

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Correct Option: A

The difference between the least cost output and actual output level is termed as____.

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Excess capacity

  2. Unbalanced capacity

  3. Balance capacity

  4. Bottleneck capactiy

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Correct Option: A
Explanation:

The least cost output is the level of optimal efficiency. This is achieved when all factors of production are employed in their most productive form. Thus when the average cost is higher than least cost it signifies the presence of inefficiencies in the economy. and thus the gap is termed as excess capacity as all resources are not employed in the most optimal way.

In which stage of production are the Average Product and Marginal Product decreasing with the Marginal Product above zero (positive)?

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. In the stage of Constant Returns

  2. In the stage of Decreasing Returns

  3. In the stage of Increasing Returns

  4. Both (a) and (c)

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Correct Option: B

In the stage of Diminishing Returns, Marginal Product (MP)-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. First increases, reaches a maximum and then decreases

  2. Decreases

  3. Increases

  4. Remains constant

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Correct Option: B

If Stage I = Increasing Returns, Stage II = Diminishing Returns, and Stage III = Negative Marginal Returns, answer the questions:
A Rational Producer will not operate in Stage I due to the reason that -

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. There is more scope for making the best use of the Fixed Factor

  2. Total Output still shows an increasing trend

  3. Optimal Combination of Fixed and Variable Factors is not yet achieved

  4. All of the above

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Correct Option: D

In which stage of production would a rational entrepreneur like to operate?

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Stage 1 where MP is maximum

  2. Stage 2 where both MP and AP are decreasing, but both are positive

  3. Stage 3 where MP is negative

  4. Either Stage 2 or 3

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Correct Option: B

A Rational Producer intends to work in-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Stage of Constant Returns

  2. Stage of Increasing Returns

  3. Stage of Diminishing Returns

  4. Stage of Negative Returns

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Correct Option: C

You are given the following data:

Factor Output
0 0
1 15
2 35
3 60
4 92
5 140

The above data is an example of:

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Decreasing returns to scale.

  2. Constant returns to scale.

  3. Increasing returns to scale.

  4. Positive fixed costs.

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Correct Option: C

If a change in scale inputs leads to a proportional change in the output, it is a case of-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Increasing Returns to Scale

  2. Constant Returns to Scale

  3. Diminishing Returns to Scale

  4. Variable Returns to Scale

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Correct Option: B