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Test: Production And Costs - 1


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10 Questions MCQ Test Indian Economy for UPSC CSE | Test: Production And Costs - 1

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Test: Production And Costs - 1 - Question 1

This a MCQ (Multiple Choice Question) based practice test of Chapter 3 - Production and Costs of Economics of Class XII (12) for the quick revision/preparation of School Board examinations

Q  Production function shows

Detailed Solution for Test: Production And Costs - 1 - Question 1

Production function is an expression of the technological relation between physical inputs and output of a good.
Symbolically: Ox = f i1, i2, i3…. in)
{Where: Ox = Output of commodity x; f = Functional relationship; i1, i2, …. in = Inputs needed for Ox}
Example of Production function:
Suppose a firm is manufacturing chairs with the help of two inputs, say labour (L) and capital (K). Then, production function can be written as: OChairs = f (L, K)
Production function defines the maximum chairs (OChairs ), which can be produced with the given capital and labour inputs. If production functions is expressed as: 250 = (7L, 2K). It means, 7 units of labour and 2 units of capital can produce maximum of 250 chairs.

Test: Production And Costs - 1 - Question 2

In the short run TPP changes with the change in which of the following factors

Detailed Solution for Test: Production And Costs - 1 - Question 2

When we employee more units of variable factor(labour) on fixed factor(land) then at the end of the point total production (tp) decrease because of more labour.

Test: Production And Costs - 1 - Question 3

In the long run TPP changes with the change in which of the following factors

Detailed Solution for Test: Production And Costs - 1 - Question 3

In the long run TPP changes with the change in all the factors  is the right option because total product can be change in long run production function. After change every situation because in long run production more time should be taken by performer.

Test: Production And Costs - 1 - Question 4

In short run which of the following factors can be changed easily

Detailed Solution for Test: Production And Costs - 1 - Question 4

In short run ..time period for production is very short ..so for increasing production only variable factor can increase instead of fixed factor. for example... a company make 40units of good x by using 3 units of labour and 5 units of capital ...if They wants to increase production from 40 to 45 so they will use 4units of labour and 5units of capital.

Test: Production And Costs - 1 - Question 5

In short run TPP changes with the change in

Detailed Solution for Test: Production And Costs - 1 - Question 5

Total production product changes with the marginal utility of the product because TP increases at diminishing rate of MP and TP is maximum when MP=0

Test: Production And Costs - 1 - Question 6

How is TPP derived from MPP

Detailed Solution for Test: Production And Costs - 1 - Question 6

Marginal physical product (MPP) is the change in the level of output due to a change in the level of variable input; restated, the MPP is the change in TPP for each unit of change in quantity of variable input.
Total physical product (TPP) -- Quantity of output that is produced from a firm's fixed inputs and a specified level of variable inputs.
So, by adding all the MPP, TPP can be derived.
 

Test: Production And Costs - 1 - Question 7

How is MPP derived from TPP

Detailed Solution for Test: Production And Costs - 1 - Question 7

Total physical product (TPP) -- Quantity of output (Y) that is produced from a firm's fixed inputs and a specified level of variable inputs (X).
 
Marginal physical product (MPP) is the change in the level of output due to a change in the level of variable input; restated, the MPP is the change in TPP for each unit of change in quantity of variable input.
 
MPP = (TPP2 - TPP1)/(X2 - X1)

Test: Production And Costs - 1 - Question 8

How is APP derived from TPP

Test: Production And Costs - 1 - Question 9

The general shape of TPP in the short run is

Detailed Solution for Test: Production And Costs - 1 - Question 9

Both the Short-run average total cost curve (SRAC) and Long-run average cost curve (LRAC) curves are typically expressed as U-shaped.

Test: Production And Costs - 1 - Question 10

The general shape of the APP in the short run is

Detailed Solution for Test: Production And Costs - 1 - Question 10

It is due to Law of Variable Proportion.Due to LVP APP first increase then became constant and then decrease.So,APP Curve is Inverse U-Shaped.

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