Multiple choice questions of Subject Commerce MCQs Topic Multiple Choice Questions on Theory of Production and Cost pdf ( Multiple Choice Questions on Theory of Production and Cost pdf Quiz ) for Entrances (Entrance Exam) Conducted by different Central and State Universities are given below.
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Multiple Choice Questions on Theory of Production and Cost pdf | Production, Cost, and Revenue
1. If a firm’s revenues just cover all its opportunity costs, then
(a) normal profit is zero
(b) economic profit is zero
(c) total revenue equals its explicit costs
(d) total revenue equals its implicit costs
Ans. b
2. Total production will be maximum when
(a) marginal production is maximum
(b) average production is maximum
(c) mărginal production is zero
(d) average production is equal to marginal production
Ans. c
3. An isoquant represents all those input combinations which are capable of producing
(a) same level of output
(b) different levels of output at different points
(c) Either ‘a’ or ‘b
(d) Both ‘a’ and ‘b’
Ans. a
4. If a more efficient technology was discovered by a firm, there would be
(a) an upward shift in the AVC curve
(b) an upward shift in the AFC curve
(c) a downward shift in the AFC curve
(d) a downward shift in the MC curve
Ans. d
5. A firm’s long-run average total cost line is
(a) identical to its long-run marginal cost line
(b) also its long-run supply curve
(c) in tact the average total cost curve of the optimal plant
(d) tangent to all the curves of short-run average total cost
Ans. d
6. Average fixed cost
(a) is u-shaped
(b) declines over the entire output range
(c) is a long-run concept only
(d) is influenced in diminishing returns to production
Ans. b
7. Why the TC and TVC curves increase in a parallel way?
(a) Because of TC
(b) Because to TVC
(c) Because of TFC
(d) All of these
Ans. c
8. Which cost curve is known as rectangular hyperbola?
(a) MC
(c) AC
(b) AVC
(d) AFC
Ans. d
9. If average total cost is Rs. 100 for a given output and marginal cost is Rs. 70, then the average fixed cost is
(a) rs 30
(b) rs 170
(c) rs 70
(d) not possible to determine with the information given
Ans. d
10. Implicit costs are
(a) equal to total fixed costs
(b) comprised entirely of variable costs
(c) payments tor self-employed resources
(d) always greater in the short-run than in the long-run
Ans. c