MCQ Economics Class 12 Chapter 3 Production and Costs Microeconomics Advertisement MCQ’s For All Chapters – Microeconomics Class 12th 1. What is production?The process of consuming goodsThe process by which inputs are transformed into outputThe process of selling inputsThe process of saving revenueQuestion 1 of 202. What is the difference between a firm's revenue and its cost called?ProfitCapitalOutputSupplyQuestion 2 of 203. What is the main objective of a firm assumed in the chapter?To increase employmentTo reduce productionTo earn maximum profitTo increase fixed costQuestion 3 of 204. What does a production function show?The maximum output possible from different combinations of inputsThe total revenue of a firmThe selling price of outputThe amount of profit earnedQuestion 4 of 205. In the production function q = f(L,K), what does L represent?LandLabourLossLevel of outputQuestion 5 of 206. What determines the maximum levels of output obtainable from different input combinations?Consumer preferencesMarket demandTechnological knowledgeFirm's revenueQuestion 6 of 207. What happens to the production function when technology improves?Maximum output decreasesMaximum output remains unchangedMaximum output becomes zeroMaximum output increasesQuestion 7 of 208. Which of the following are considered factors of production in the simplified production function?Labour and capitalRevenue and profitPrice and demandOutput and costQuestion 8 of 209. What is a fixed factor in the short run?A factor whose price changesA factor that remains unchangedA factor that is always freeA factor that cannot be usedQuestion 9 of 2010. What is a variable factor in the short run?A factor that cannot be changedA factor whose quantity can be variedA factor that has no costA factor that produces no outputQuestion 10 of 2011. What is true about the long run?At least one factor remains fixedAll factors of production can be variedNo output can be producedOnly labour can be variedQuestion 11 of 2012. What is an isoquant?A set of input combinations producing the same maximum level of outputA curve showing total costA curve showing total revenueA set of prices of inputsQuestion 12 of 2013. Why are isoquants negatively sloped when marginal products are positive?Both inputs must increase togetherOutput must always decreaseMore of one input requires less of the other to maintain the same outputInput prices are always fallingQuestion 13 of 2014. What is total product?Output per unit of inputThe relationship between a variable input and output when other inputs are held constantChange in output per unit of inputTotal cost divided by outputQuestion 14 of 2015. How is average product calculated?Total product ÷ variable inputVariable input ÷ total productChange in output ÷ change in inputTotal cost ÷ outputQuestion 15 of 2016. What is marginal product?Total output divided by inputTotal cost divided by outputChange in output per unit change in inputTotal revenue minus total costQuestion 16 of 2017. If total product rises from 10 units to 24 units when labour increases from 1 unit to 2 units, what is the marginal product of the second unit of labour?10 units12 units14 units24 unitsQuestion 17 of 2018. According to the chapter, total product is equal to:The sum of marginal productsThe sum of average products onlyTotal costAverage costQuestion 18 of 2019. What happens to marginal product under the law of variable proportions?It always remains constantIt initially rises and then fallsIt always fallsIt becomes zero immediatelyQuestion 19 of 2020. Why does marginal product eventually fall when more workers are employed with fixed land?Workers become more productive indefinitelyThe amount of land per worker increasesThe production process becomes crowded with the variable inputFixed factors disappearQuestion 20 of 20 Loading...
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