Top 1000+ Solved Fundamentals of Economics and Management MCQ Questions Answer
Q. Explicit cost refers to
a. Actual expenses of the firm to purchase or hire input it needed
b. Actual and notional expenses of the firm to purchase or hire input it needed
c. Notional expenses of the firm to purchase or hire input it needed
d. All the three
Q. Implicit cost refers to ………………
a. Value of inputs owned by the firm and used in its own manufacturing process
b. Value of input or services purchased from outside and used in its own manufacturing process
c. Value of inputs owned by the firm and sold to others
d. Value of inputs or services for which no payments were made to outside
Q. Which of these costs will increase or decrease with increase in production
a. Marginal cost
b. Financial costs
c. Fixed costs
d. All the three
Q. If a firms cost of raw material increases then
a. Market price of the final product will also increase
b. Equilibrium level of quantity also increases
c. Marginal cost curve will shift upward
d. Marginal cost curve will shift downward
Q. If a firms cost of raw material decreases then
a. Marginal cost curve will shift downward
b. Marginal cost curve will shift upward
c. Market price will go down
d. Market price will go up
Q. The law of diminishing returns applies in…………….
a. Short run
b. Long run
c. Very short run
d. All the time period
Q. If total production increases in the short run, the total cost will also……..
a. Increase due to increase in fixed cost
b. Increase due to increase in variable cost
c. Increase due to increase in total cost
d. Remain constant
Q. Marginal cost is defined as…………………….
a. Change in total cost due to addition of one unit
b. Total cost divided by additional unit
c. Total cost divided by total units produced
d. Total sales / Total production
Q. The positively sloped part of long run cost curve of a firm is due to
a. Economies of scale
b. Diseconomies of scale
c. Diminishing returns to scale
d. Marginal utility theory
Q. The negatively sloped part of long run cost curve of a firm is due to
a. Increase in production due to specialization and division of labour
b. Diseconomies of scale
c. Diminishing returns to scale
d. Marginal utility theory
Q. Which of the following statement is true about average cost function
a. ATC= AFC-AVC
b. AVC = AFC + ATC
c. AFC = ATC+AVC
d. ATC = AFC + AVC
Q. In question No. 123 the average total cost of producing 3 units is
a. `14.5
b. `15.5
c. `13
d. `21