CA Foundation Economics - Theory of Production Quiz 40 Created on August 23, 2023 By admin Theory of Production Quiz 1 1 / 20 Which of the following statements is true? The services of a doctor are considered production Man can create matter The services of a housewife are considered production When a man creates a table, he creates matter 2 / 20 Which of the following is considered production in Economics? Tilling of soil Singing a song before friends Preventing a child from falling into a manhole on the road Painting a picture for pleasure 3 / 20 Which of the following is considered as production in economics? Helping a blind person in crossing the road Group dance performance in a college annual function Holding a child who is falling from a wall Performing an art in a theatre 4 / 20 What is Production is Economics: Creating/Addition of Utility Production of food grains Creation of services Manufacturing of goods 5 / 20 Production does not include work done ________. Within a household out of love & affection Voluntary services For self consumption All of the above 6 / 20 ________ to exchange in the market is an essential component of production. Intention Ability Capacity Possibility 7 / 20 According to ________, Production is the organized activity of transforming resources into finished products in the form of goods and services, and the objective of production is to satisfy the demand of such transformed “resources”. James Bates J.R. Parkinson Marshall Both (a) and (b) 8 / 20 Production is defined as: Creation of matter Creation of utility in matter Creation of infrastructural facilities None of the above 9 / 20 In Economics, entire process of ________ is nothing but creation of utilities in the form of goods and services. Consumption Production Exchange Distribution 10 / 20 Which of the following is not a characteristics of Land? It is a free gift of nature It is a mobile factor of production It is limited in quantity Its productive power is indestructible 11 / 20 Which of the following is not a characteristic of land? Its supply for the economy is limited It is immobile Its usefulness depends on human efforts It is produced by our forefathers 12 / 20 Which of the following factors of production is a free gift of nature and refers to Natural resources? Land Labour Capital Entrepreneurial Ability 13 / 20 ________ are the factors or resources which make it possible to produce goods and services. Land, Labour, and Bank Capital, Owner and manpower Land, Labour and Entrepreneurial ability Land, Labour, Capital and Entre preneurial ability 14 / 20 Factors of production refer to : Inputs Outputs Both (a) & (b) Either (a) or (b) 15 / 20 The total supply of Land is ________ from the point of view of the economy. However, it is relatively ________ from the point of view of a firm. Perfectly Inelastic, Inelastic Perfectly Inelastic, Relatively Elastic Perfectly Elastic, Inelastic Perfectly Elastic, elastic 16 / 20 Which of the following is correct about Land? It is mobile It has single use Its supply is fixed It is homogeneous 17 / 20 No two pieces of land and alike. They differ in fertility and situation. Therefore, Land is ________. Homogenous Heterogeneous Bitrogeneous None of these 18 / 20 Which of the following statement about factors of production is not true? Land is a passive factor Land is a free gift of nature Land is immobile Land is perishable 19 / 20 Which among the following is not a characteristic of land? It is an active factor It has variety of uses Its production powers are indestructible Its supply is limited 20 / 20 Labour force wants more ________ Facility Leisure Benefit All of the above Your score isThe average score is 75% LinkedIn Facebook VKontakte 0% Restart quiz 26 Created on August 23, 2023 By admin Theory of Production Quiz 2 1 / 20 Without the active participation of labour, land and capital may not produce anything. It means labour is factor. Passive Active Working Executing 2 / 20 Labour is highly perishable in the sense that ________. A labourer cannot store his labour The life of labour is short The labourer sells his labour against wages, but retains the capacity to work The labour is always low priced 3 / 20 The labour power or efficiency of labour depends upon the ________ Laborer’s inherent and acquired qualities. Features of work environment Incentive to work All of the above 4 / 20 Which of the following is not a characteristic of labour? It is perishable It has weak bargaining power Labour and Labour power cannot be separated Labour is not mobile 5 / 20 ________ means a sustained increase in the stock of real capital in a Country. Capital formation Savings Mobilization of Savings Mobilization of Capital 6 / 20 The three stages of capital forma-tion are : Savings, Mobilization of Savings and investment Mobilization of Saving, Savings, and investment Investment, Saving and mobiliza-tion of Saving Saving, Investment and mobiliza-tion of savings 7 / 20 Which one of the following may be regarded as a part of social capital? Roads Bridges Machinery Both (a) & (b) 8 / 20 ________ Capital performs its function is production in a single use and is not available for future use. Circulating Fixed Tangible Human 9 / 20 Human capital refers to: Savings by individuals Mobilisation of saving Human skills and abilities Productive investment 10 / 20 The most important function of an entrepreneur is to ________. Innovate Bear the sense of responsibility Finance Earn profit 11 / 20 Innovation theory of entrepreneur-ship is propounded by: Knight Schumpeter Max Weber Peter Drucker 12 / 20 An Entrepreneur undertakes which one of the following functions? Initiating a business and resource co-ordination Risk or uncertainty bearing Innovations All of the above 13 / 20 Functions of the entrepreneur are: Risk bearing Initiating a business enterprise and resource co-ordinating Introducing new innovations All of the above 14 / 20 Which one of the following statements is not correct? Land has indestructible powers Labour is mobile Capital is nature’s gift Land is a passive factor 15 / 20 Which one of the following function is performed by entrepreneur? Initiating Business Enterprise and resource Co-ordination Risk-bearing or uncertainty bearing Innovations All of the above 16 / 20 ________ mobilizes factors of production, combines them in the right proportion, initiates the process of production and bears the risks involved in it. Businessman Manager CEO Entrepreneur 17 / 20 ________ objective implies the profit maximizing behaviour of the firm. Organic Economic Social National 18 / 20 The basic minimum objective of all kinds of enterprises is to survive or to stay alive. It may be regarded as ________ objective of the enterprise. Organic Economic Social National 19 / 20 Who has given the concept of Innovative Entrepreneurship? Robbins Adam Smith Schumpeter Sweezy 20 / 20 According to ________, the true function of an entrepreneur is to introduce innovations. Schumpeter Peter Ducker Paul Samuelson None of the above Your score isThe average score is 85% LinkedIn Facebook VKontakte 0% Restart quiz 23 Created on August 23, 2023 By admin Theory of Production Quiz 3 1 / 20 What is a production function? Technical relationship between physical inputs and physical output Relationship between fixed factors of production and variable factors of production Relationship between a factor of production and the utility created by it Relationship between quantity of output produced and time taken to produce the output 2 / 20 The production function is a rela-tionship between a given combination of inputs and: Another combination that yields the same output The highest resulting output The increase in output generated by one-unit increase in one output All levels of output that can be generated by those inputs 3 / 20 A production function is defined as the relationship between ________. The quantity of physical inputs and physical output of a firm Stock of inputs and stock of output Prices of inputs and output Price and supply of a firm 4 / 20 Which of the following is the best definition of “production function”? The relationship between market price and quantity supplied. The relationship between the firm’s total revenue and the cost of production. The relationship between the quantities of inputs needed to produce a given level of output. The relationship between the quantity of inputs and the firm’s marginal cost of production. 5 / 20 Which of the following statements is true? After the inflection point of the production function, a greater use of the variable input induces a reduction in the marginal product. Before reaching the inevitable point of decreasing marginal returns, the quantity of output obtained can increase at an increasing rate. The first stage corresponds to the range in which the AP is increasing as a result of utilizing increasing quantities of variable inputs. All the above 6 / 20 Which function shows relationship between input and output? Consumption function Investment function Production function Cost function 7 / 20 ________ shows the overall output generated at a given level of input: Cost function Production function ISO cost Marginal rate of technical substitution 8 / 20 The production function: Is the relationship between the quantity of inputs used and the resulting quantity of product Tells us the maximum attainable output from a given combination of inputs Expresses the technological relationship between inputs and output of a product All the above 9 / 20 Production function is: Purely a technical relationship between input & output Purely an economic relationship between input & output Both the technical &economical relationship between input & output None of the above 10 / 20 In the short run, the firm’s product curves show that ________ Total product begins to decrease when average product begins to decrease but continues to increase at a decreasing rate. When marginal product is equal to average product, average product is decreasing but at its highest. When the marginal product curve cuts the average product curve from below, the average product is equal to marginal product. In stage two, total product increases at a diminishing rate and reaches maximum at the end of this stage. 11 / 20 In describing a given production technology, the short run is best described as lasting: Up to six months from now Up to five years from now As long as all inputs are fixed As long as at least one input is fixed 12 / 20 To economists, the main difference between the short run and the long run is that: In the short run all inputs are fixed, while in the long run all inputs are variable In the short run the firm varies all of its inputs to find the least-cost combination of inputs In the short run, at least one of the firm’s input levels is fixed In the long run, the firm is making a constrained decision about how to use existing plant and equip¬ment efficiently 13 / 20 The short run, as economists use the phrase, is characterized by: At least one fixed factor of pro-duction and firms neither leaving nor entering the industry Generally a period which is shorter than one vear All factors of production are fixed and no variable inputs All inputs are variable and pro-duction is done in less than one year 14 / 20 Which one of the following is the assumption underlying any production function? Relationship between inputs and outputs exists for a period of time There is a given “State -of- the act” in the production technology Whatever input combinations one included in a particular function, the output resulting from their utilization is at the maximum level All of the above 15 / 20 Paul Douglas and Cobb studied the production function of the ________ manufacturing industries. American Japanese British Asian 16 / 20 In the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience ________ An increase in pollution level Diseconomies of scale Economies of scale Constant returns to scale 17 / 20 A fixed input is defined as ________. That input whose quantity can be quickly changed in the short run, in response to the desire of the company to change its production. That input whose quantity cannot be quickly changed in the short run, in response to the desire of the company to change its production. That input whose quantities can be easily changed in response to the desire to increase or reduce the level of production. That input whose demand can be easily changed in response to the desire to increase or reduce the level of production. 18 / 20 Long-run does not have: Average Cost Total Cost Fixed Cost Variable Cost 19 / 20 Long period production function is related to: Law of variable proportions Laws of returns to scale Law of diminishing returns None of the above 20 / 20 In its original form, the Cobb- Douglas production function applies: To individual firm To selected Firms To whole of manufacturing in the USA None of the above Your score isThe average score is 80% LinkedIn Facebook VKontakte 0% Restart quiz 23 Created on August 23, 2023 By admin Theory of Production Quiz 4 1 / 20 In Cobb-Douglas production function, two inputs are: Land and Labour Labour and Capital Capital and Entrepreneur Entrepreneur and land 2 / 20 What will be the total product when two labourers are hired according to the table given below?No. of labourersTotal ProductMarginal product0——13503502—250 680 580 350 230 3 / 20 According to Cobb-Douglas pro-duction function, will get ________ returns to scale? Constant Diminishing Increasing Any of the above 4 / 20 The conclusion drawn from Cobb-Douglas production function is that labour contributed about ________ and capital about ________ of the increase in the manufacturing production. 3rd/4,1st/4 1/2,1/2 1th/4,3th/4 None of the above 5 / 20 If Cobb-Douglas function is given by Q = KLaCb, then there will be ________ when (a+b) ________. Increasing returns, > 1 Increasing returns to scale, > 1 Diminishing returns, < 1 Decreasing returns to scale, = 1 6 / 20 The famous Cobb-Douglas production function is based on studies of ________ industries in the United States of America. Manufacturing Construction Consumer Aviation 7 / 20 Use the following diagram to answer the question given below itThe marginal physical product of the third unit of labour is ________, the MP of the ________ labour is Negative Six; fourth Six; third Six; fifth Six; sixth 8 / 20 Suppose the first four units of a variable input generate corresponding total outputs of 200, 350, 450, 500. The marginal product of the third unit of input is: 50 100 200 150 9 / 20 Average product is defined as ________ Total product divided by the total cost. Total product divided by marginal product. Total product divided by the number of units of variable input. Marginal product divided by the number of units of variable input. 10 / 20 ________ is the total output resulting from the efforts of all the fac-tors of production combined together at any time. Total Product Average Product Marginal Product None of the above. 11 / 20 Consider the following table:LabourTotal OutputMarginal Product011001002803240 80 100 180 200 12 / 20 Which of the following is Correct? MPn = TPn – TPn-1 MPn = MPn – MPn-1 MPn = TPn + TPn-1 None of the above 13 / 20 Marginal product, mathematically, is the slope of the ________. Total product curve. Average product curve. Marginal product curve. Implicit product curve. 14 / 20 The production process described below exhibits.Number of WorkersOutput00123240350 Diminishing marginal product of labour. Increasing return to scale. Increasing marginal product of labour. 15 / 20 Suppose the first four units of a variable input generate corresponding total output of 150, 200, 350, 550. What will be the marginal product of the third unit of input? 50 100 150 200 16 / 20 At the point of inflexion, the marginal product is: Increasing Decreasing Maximum Negative 17 / 20 Identify the correct statement: The average product is at its maxi-mum when marginal product is equal to average product. The law of increasing returns to scale relates to the effect of changes in factor proportions. Economies of scale arise only because of indivisibilities of factor proportions. Internal economies of scale can accrue when industry expands beyond optimum. 18 / 20 The marginal product curve is above the average product curve when the average product is: Increasing Decreasing Constant None 19 / 20 When average product rises as a result of an increase in the quantity of variable factor, marginal product is: Equal to average product More than average product Less than average product Becomes negative 20 / 20 Marginal, average and total product of a firm in the short run will not comprise with ________. When marginal production is at a maximum, average product is equal to marginal product, and total product is rising When average product is maximum, average product is equal to marginal product, and total product is rising When marginal product is negative, total product and average product are falling When total product is increasing, average product and marginal product may be either rising or falling Your score isThe average score is 65% LinkedIn Facebook VKontakte 0% Restart quiz 17 Created on August 23, 2023 By admin Theory of Production Quiz 5 1 / 20 If the marginal product of labour is below the average product of labour, it must be true that: The marginal product of labour is negative. The marginal product of labour is zero. The average product of labour is falling. The average product of labour is negative. 2 / 20 Law of variable proportion is valid when: Only one input is fixed and all other inputs are kept variable All factors are kept constant All inputs are varied in the same proportion None of these 3 / 20 In the production of wheat, all of the following are variable factors that are used by the farmer except: The seed and fertilizer used when the crop is planted. The field that has been cleared of trees and in which the crop is planted. The tractor used by the farmer in planting and cultivating not only wheat but also corn and barley. The number of hours that the farmer spends in cultivating the wheat fields. 4 / 20 If the marginal product of labour is below the average product of labour. It must be true that: Marginal product of labour is negative Marginal product of labour is zero Average product of labour is fall¬ing Average product of labour is negative 5 / 20 The marginal, average, and total product curves encountered by the firm producing in the short run exhibit all of the following relationships except: When total product is rising, average and marginal product may be either rising or falling. When marginal product is negative, total product and average product are falling. When average product is at a maximum, marginal product equals average product, and total product is rising. When marginal product is at a maximum, average product equals marginal product, and total product is rising. 6 / 20 The average product of labour is maximized when marginal product of labour: Equals the average product of labour. Equals zero. Is maximized. None of the above. 7 / 20 During 2nd stage of law of Diminishing returns: MP and TP is maximum MP and AP are decreasing AP is negative TP is negative 8 / 20 In the first stage of law of variable proportions, total product increases at the ________. Decreasing rate Increasing rate Constant rate Both (a) and (b) 9 / 20 Law of increasing returns is applicable because of ________. Indivisibility of factors. Specialization Economies of scale Both (a) & (b) above 10 / 20 The Law of Variable Proportions is associated with: Short period Long period Both short and long periods Neither short nor long period 11 / 20 Production activity in the short period is analysed with the help of: Law of variable proportion Laws of returns to scale Both (a) & (b) None of the above 12 / 20 In the third of the three stages of production: The marginal product curve has a positive slope. The marginal product curve lies completely below the average product curve. Total product increases. Marginal product is positive. 13 / 20 Law of diminishing returns is applicable in: Manufacturing industry Agriculture Neither (a) nor (b) Any economic activity at a point of time. 14 / 20 The phenomenon of diminishing returns rests upon the ________ of the fixed factor: Divisibility Flexibility Indivisibility None of these 15 / 20 Diminishing marginal returns implies: Decreasing average variable costs Decreasing marginal costs Increasing marginal costs Decreasing average fixed costs 16 / 20 A rational producer will produce in the stage in which marginal product is positive and: MP> AP MP = AP MP < AP MP is zero 17 / 20 The concept of Returns to Scale is related with: Very short period Short period Long period None of above 18 / 20 Diminishing returns occur: When units of a variable input are added to a fixed input and total product falls. When units of a variable input are added to a fixed input and marginal product falls. When the size of the plant is in-creased in the long run. When the quantity of the fixed input is increased and returns to the variable input falls. 19 / 20 The “law of diminishing returns” applies to ________. The short run, but not the long run The long run, but not the short run Both the short run and the long run Neither the short run nor the long run 20 / 20 Diminishing marginal returns implies ________ Decreasing average variable costs Decreasing marginal costs Increasing marginal costs Decreasing fixed costs Your score isThe average score is 62% LinkedIn Facebook VKontakte 0% Restart quiz 15 Created on August 23, 2023 By admin Theory of Production Quiz 6 1 / 21 Increasing returns to scale can be explained in terms of: External and internal economies External and internal dis-economies External economics and internal dis-economies All of these 2 / 21 Consider the following combinations of inputs and outputs:This production technology satisfiesLabourCapitalOutput5101612271438164918510206 Increasing returns to scale Diminishing returns to scale Constant returns to scale Increasing returns initially, fol-lowing by decreasing returns to scale 3 / 21 Which of the following is the reason of the working of law of increasing returns? Fuller utilisation of fixed factors Indivisibility of the factors Greater specialization of labour All of the above 4 / 21 Returns to scale will said to be in operation when quantity of : All inputs are changed All inputs are changed in already established proportion All inputs are not changed One input is changed while quantity of all other inputs remain the same 5 / 21 Which of the following statements describes increasing returns to scale? Doubling of all inputs used leads to doubling of the output. Increasing the inputs by 50% leads to a 25% increase in output. Increasing inputs by 1 / 4 leads to an increase in output of 1/3. None of the above 6 / 21 Increasing returns to scale occurs due to: Economies of scale Specialization Indivisibility of factors All of these 7 / 21 Increase in all input leading to less than proportional increase in output is called ________. Increasing returns to scale Decreasing returns to scale Constant returns to scale Both increasing and decreasing returns to scale 8 / 21 A change in scale means that ________ factors of production are increased or decreased in the same production. Two Three No All 9 / 21 In Cobb-Douglas Production function[Q = KLaCb], there will be increasing returns to scale if : a + b > 1 a + b = 1 a + b = 0 a + b < 1 10 / 21 If decreasing returns to scale are present, then if all inputs are increased by 10% then: Output will also decrease by 10%. Output will increase by 10% Output will increase by less than 10% Output will increase by more than 10% 11 / 21 Linear homogeneous production function is based on: Increasing returns to scale Decreasing returns to scale Constant returns to scale None of the above 12 / 21 ISO quants are equal to: Product Lines Total utility lines Cost lines Revenue lines 13 / 21 When output increase in a smaller proportion with an increase in all inputs ________ returns to scale set in. Increasing Decreasing Constant Circular 14 / 21 With a view to increase his production, Hariharan a manufacturer of shoes, increases all the factors of production in his unit by 100%. But at the end of the year, he finds that instead of an increase of 100%, his production has increased by only 80%. Which law of returns to scale is operating in this case? Increasing returns to scale Decreasing returns to scale Constant returns to scale None of the above 15 / 21 Constant Returns to Scale are also called as ________ Production Function. Linear Curvilinear Linear Homogenous Curvilinear Homogenous 16 / 21 When output decreases by 20% due to increase in inputs by 20%, this stage is called the law of ________. Increasing returns to scale. Decreasing returns to scale. Constant returns to scale. None of the above. 17 / 21 Which of the following statement is true in relation to an ISO Quant Curve? It represents those combination of two factors of production that will give the same level of output It represents those combinations of all the factors that will give the same level of output It slopes upward to the right It can tough either axis 18 / 21 ISO quants are negatively sloped & ________ to the origin due to ________ Marginal Rate of Tech-nical Substitution (MRTS). Convex, Increasing Convex, Decreasing Concave, Increasing Concave, Decreasing 19 / 21 An ISO quant shows ________. All the alternative combinations of two inputs that can be produced by using a given set of output fully and in the best possible way. All the alternative combinations of two products among which a producer is indifferent because they yield the same profit. All the alternative combinations of two inputs that yield the same total product. Both (b) and (c). 20 / 21 An ISO quant is ________ to an ISO cost line at equilibrium point: Convex Concave Tangent Perpendicular 21 / 21 ISO quants are also known as: Production possibility curves Indifference curves Production indifference curves None of the above Your score isThe average score is 58% LinkedIn Facebook VKontakte 0% Restart quiz
