Top 80+ Solved MicroEconomics, Theory and Applications 1 MCQ Questions Answer
Q. If all resources used in the production of a product are increased by 20 percent and outputincreases by 20 percent, then there must be:
a. economies of scale
b. diseconomies of scale
c. constant returns to scale
d. increasing average total costs.
Q. ______ shows the overall output generated at a given level of input:
a. cost function
b. production function
c. iso cost
d. marginal rate of technical substitution
Q. The marginal product curve is above the average product curve when the average product is :
a. increasing
b. decreasing
c. constant
d. none
Q. Increasing returns to scale can be explained in terms of:
a. external and internal economies
b. external and internal diseconomies
c. external economics and internal diseconomies
d. all of these
Q. An isoquant is ______ to an iso cost line at equilibrium point:
a. convex
b. concave
c. tangent
d. perpendicular
Q. At the point of inflexion, the marginal product is:
a. increasing
b. decreasing
c. maximum
d. negative
Q. Diminishing marginal returns implies:
a. decreasing average variable costs
b. decreasing marginal costs
c. increasing marginal costs
d. decreasing average fixed costs
Q. If the marginal product of labour is below the average product of labour. It must be true that:
a. marginal product of labour is negative
b. marginal product of labour is zero
c. average product of labour is falling
d. average product of labour is negative
Q. Law of variable proportion is valid when:
a. only one input is fixed and all other inputs are kept variable
b. all factors are kept constant
c. all inputs are varied in the same proportion
d. none of these