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Production Function 2

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Pamela
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16 views3 pages

Production Function 2

Uploaded by

Pamela
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Which of the following equations is correct:


(1 Point)
AP= Q/L
MP= Q/ ΔL
MP= ΔQ/L
none of these
2.When MP increases then TP
(1 Point)
increases at an increasing rate
reaches its maximum
increases at a decreasing rate
none of these
3.Short run and long run are differentiated on the basis of fixed
time period.
(1 Point)
True
False
4.Point of inflexion refers to the point from where
(1 Point)
slope of TP changes
TP stops increasing at an increasing rate
slope of AP changes
Both a and b
5._______________ is only a long period possibility.
(1 Point)
Returns to Factor
Returns to Scale
6.An intelligent producer can avoid the occurrence of
diminishing returns to a factor even with the existing
technology.
(1 Point)
True
False
7.Marginal Product can be positive, zero or negative, but
average product is always positive.
(1 Point)
True
False
8.It is because of the law of variable proportions that MP curve
makes an inverted -U
(1 Point)
True
False
9.Read the statements given below and choose one of the
correct alternatives:

Assertion (A) : Variable factors can be changed in the short


run.
Reason (R): Variable factors are not required in case of zero
output.
(1 Point)
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the
correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
10.Marginal Product is also called
(1 Point)
Total product
Gross Product
Average Product
Incremental Product
11.Fall in MP must lead to a fall in AP as well.
(1 Point)
True
False
12.Which of the following equations is correct
(1 Point)
MP= TPn- TPn-2
AP= TP * L
TP= AP/L
MP= ΔTP/ ΔL
13.Variable proportions type production function exists:
(1 Point)
when with change in the level of output there is a change in the factor
ratio
when scale of production changes with change in the level of output
both a and b
14.i) MP increases a) TP is maximum
ii) MP decreases but (+ve) b) TP starts falling
iii) MP zero c) TP increases at an
increasing rate
iv) MP becomes (-ve) d) TP increases at a
diminishing rate
(1 Point)
i-a, ii-b, iii-c, iv-d
i-d, ii-c, iii-b, iv-a
i-c, ii-d, iii-a, iv-b
i-c, ii-b, iii-a, iv-d
15.Stages of production are the consequences of
(1 Point)
Law of Diminishing Marginal Rate of Transformation
Law of Diminishing Marginal utility
Law of Variable Proportions
Law of Diminishing returns to scale
16.Match the following:

i) Long run production function a) TPn-TPn-1


ii) Short period b) As long as MP> AP
iii) Marginal Product c) Production capacity
remains constant
iv) AP increases d) Stage of increasing
returns
v) Increasing MP e) Factor ratio doesn't
change with change in the volume of output
(1 Point)
i-e, ii-c, iii-a, iv-d, v-b
i-e, ii-c, iii-a, iv-b, v-d
i-e, ii-d, iii-b,-iv-c,-v-a
i-d, ii-b, iii-c, iv-a, v-e

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