MULTIPLE CHOICE QUESTIONS
1. Which cost is important to know the alternative uses of factors of production?
A) Opportunity cost B) Marginal cost C) Real cost D) Both (A) and (B)
2. ………….works as a guideline for administration of the company,
A) Real cost B) Monetary cost C) Opportunity cost D) Marginal cost
3. As per classical economics, real cost was considered in
A) Land and labor C) Capital and entrepreneur
B) Labor and capital D) All factors of production
4. According to whom the laborers involved in production undergo psychological and
physical burden?
A) Robinson B) Chamberlin C) Prof. Leftwich D) Marshall
5. Who presented the concept of opportunity cost?
A) A Dutch researcher C) An Austrian economist
B) A German teacher D) A Management professor
6. Which of the following works on the principle `means of production have alternative
uses'?
A) Opportunity cost B) Marginal cost C) Monetary cost D) Variable cost
7. We can broadly classify production costs as ………..
A) Fixed cost and variable cost C) Marginal cost and real cost
B) Short run & long run production cost D) Opportunity cost and monetary cost
8. Fixed cost is also known as
A) Expenses B) Temporary cost C) Overhead cost D) All of these
9. TFC curve is
A) U-shaped B) Hockey stick shaped C) Parallel to X-axis D) Upward sloping
10. Change in quantity of production results in change in cost. Which cost is this?
A) Variable cost B) Real cost C) Opportunity cost D) All of these
11. Variable cost is also known as
A) Unstable cost B) Main cost C) Direct cost D) All of these
12. Difference exists between fixed cost and variable cost
A) Always B) For short run C) Rarely D) For long period
13. Prof, Marshall calls variable cost as a main cost because
A) It has a negative slope C) It increases significantly compared to fix cost
B) It is directly related with production D) Both (B) and (C)
14. There is a relationship between total production cost and total cost.
A) Exponential B) Cyclic C) Cause-effect D) Inverse
15. TC=____________
A) TVC + TFC - MC B) TVC + TFC + MC C) TOC + MC + NC D) TVC + TFC
16. TC curve is___________
A) Negatively sloped B) Parallel with TVC C) Above NC curve D) Both (B) and (C)
17. Which of the following statements is true?
A) TC curve and TVC curve start from origin 0.
B) TVC starts from a specific point on Y-axis & TC from origin 0.
C) TC starts from a specific point on Y-axis and TVC from origin 0.
D) Both TC and TVC start from a specific point on Y-axis.
18. Average fixed cost=________
A) TFC / TP C), TP / TFC D) TVC+(MC/TP)
19. How does the average cost curve behave as production Increases?
A) Goes on decreasing positively C) Rises, remains constant and then falls
B) Falls, remains constant and then rises D) remains parallel to X-axis and then falls
20. MCn = TCn _________.
A) - TCn-1 B) x TCn-1 C) TCn D) 2TCn-1
21. The curve of marginal cost is
A) U shaped B) Straight line C) Hockey shaped D) Zigzag shaped
22. How many types of relations exist between average cost and marginal cost?
A) 1 B) 2 C) 3 D) Many
23. As per who, fixed cost - variable cost in long run?
A) Marshall B) Stigler C) Robinson D) Benham
24. Total revenue changes when
A) Price per unit changes C) Both per unit price and total sale changes
B) Total sale changes D) All of these.
25. Commodities are homogeneous in,
A) Perfect competition market C) Monopoly
B) Monopolistic market D) Imperfect competition market
26. Which relation holds true in competition market?
A) P=AR-MR B) P=AR+MR C) P ≠ AR≠ MR D) P=AR=MR
27. In perfect competition market, TR curve
A) Parallel to X-axis B) Parallel to Y-axis C) At 45° D) Downward slopping
28. How is is Average Cost curve shaped?
A) Hockey silk B) U C) V D) square
29. Which cost cannot be measured?
A) Real cost B) Monetary cost C) Opportunity cost D) Long run cost
30. When production is zero then which cost is Positive
A) Monetary cost B) average cost C) Variable cost D) Fixed cost
31. Which coat has direct relation with the production units?
A) Fixed cost B) Variable cost C) Average cost D) Marginal cost
32. In which market, Average Revenue and Marginal Revenue are same?
A) Perfect Competition B) Monopoly C) Monopolistic Competition D) Oligopoly
33. How Is the slope of fixed cost curve?
A) Negative B) Positive C) Parallel to X-axis D) Parallel to X-axis