(MCOs)MULTIPLE CHOICE QUESTIONS and

(MRQs) MULTIPLE RESPONSE QUESTIONS

In the followingQuestions, there may be one or more than one correct answer. You have to mark all the correct answers.
1. Which of the followingstatements accurately describe the relationship between AP and MP?
(a) AP rises when MP is above it and falls when MP is below it.
(b) AP and MP are always parallel to each other.
(c) MP intersects AP at its maximum point.
(d) AP is always rising when MP is falling and vice-versa.
2. When MP is zero, what can you say about TP?
(a) TP is increasing (b) TP is maximum
(c) TP is falling (d) None of the above
3. Marginal Product refers to addition to total output when one more:
(a) Unit is produced (b) Unit is sold
(c) Unit is consumed (d) Unit of variable factor is employed
4. The period of time in which the plant capacity can be varied is known as:
(a) Short run (b) Long run
(c) Both (a) and (b) (d) Neither (a) nor (b)
5. is the extension of "Law of Diminishing Returns".
(a) Law of Variable Proportions (b) Law of Demand
(c) Law of Equi-marginalutility (d) Law of Diminishing Marginal Utility
6. Law of Variable Proportions is also known as:
(a) Lawof Returns to Scale (b) Returns toVariable Factor
(c) Law of Returns to Factor (d) Allof these
7. The maximum possible output for a firm with two units of labour (L)and ten units of capital (K), if its
production function is given as: 5L + 2K
(a) O units (b) 30 units
(C) 200 units (d) 50units
8. ldentify the phase in which TP increases at an increasing rate and MPalso increases.
(a) Increasing returns to a factor (b) Diminishingreturns to a factor
(c) Negative returns to a factor (d) None of these
9. Which of the following is not a reason for operation of increasing returns to a factor?
(a) Better utilisation of fixed factor (b) Limitation of fixed factor
 5.27
ProductionFunction
variable factor (d) Imperfect Substitutes
iC) Increase in efficiency of
marginal product is:
40 When average produCt increases, the
(a) Less than average
product (b) Equal to the average product
product (d) None of these
(c) More the average
MP is more than AP?
41 What happens to AP when (b) APfalls
(a) AP rises
Constant (d) None of these
(c) AP remains
MP becomes negative?
49 What is the behaviour of TP when
an increasingrate (b) TP increases at diminishing rate
(a) TP increases at (d) TP decreases
point
(c) TP is at its maximum
Proportions,there are phases.
13. According to Law of Variable (b) 3
(a) 1
(d) 4
(c) 2
negative because:
14. Average product cannot be negative
zero (b) Total product can never be
(a) Total product can never be (d) Both (a) and (b)
(c) Neither (a) nor (b)
to an eventual fall in:
15. The lawof diminishingreturns refers (b) Total earnings of the
firm
(a) Productivity of factors of production
factor (d) None of these
(c) Marginal product of the variable product sequence:
(diminishing returns to a factor) is exhibited by the following total
16. The 2nd phase (b) 50, 110, 180, 260
(a) 50,50, 50, 5O (d) 50, 90, 120, 140
(c) 50,100,150, 200 inefficiency:
Variable Proportions has been ruled out on the grounds of technical
17. Which phase of Law of (b) Diminishing returns to a
factor
(a) Increasing returns to a factor (d) None of these
Negative returns to a factor
(c)
operate in of Lawof Variable Proportions:
18. Arational producer always aims to returns to a factor)
afactor) (b) 2nd Phase (Diminishing
returns to Phase
(a) 1st Phase (Increasing factor) (d) Either 1st Phase or 2nd
to a
(C) 3d Phase (Negative returns
production functions measures:
19. Ingeneral, most of the
of production
(a) Productivity of factorsbetween the factors of production
(0) Economical relation
between inputs and output.
(C) Technical relation
(d) None of these
employed is termed as:
20. Product per unit of labour (b) Marginal product
(a) Average product (d) None of these
(c) Total product
21. When AP is maximum, MP is equal to: (b) TP
(a) AP (d) One
(c) Zero
of production:
c2. Variable factors refer tothose factors (b) Which can be changed in the short run
(a) Which can be only changed in the long run (d) Which vary directlywith output
(C) Which can never be changed
23. Both AP and MP curves are generally: (b) Inversely U-shaped
(a) U-shaped
(d) Falling
(c) Rising
5.28 Introductory Microeconomics
is best described as lasting:
24. In describing a given production technology. the short(b)runUpto five years from now
(a) Up to six months from now
(d) As long as at least one input is fixed
(C) As long as all inputs are fixed
production are variable.
25. is the period of time in which all the factors of
(a) Short-run (b) Long-run
(d) None of these
(c) Medium-run
26. The 'Marginal Product' of a variable input is best described as:
(a) Product divided by the number of units of variable input
(b) Additional output resulting from a unit increase in the variable input
(c) Change in total product when one more unit of variable factor is employed
(d) Additional output resulting from aunit increase in the units produced
27. Onthe basis of following schedule,answer the followingquestions:
Units of Labour Total Product (TP) Marginal Product (MP)
1 10 10
2 12
3 36 ?

(i) What is TP at 2 units of labour?

(a) 10 (b) 12
(c) 22 (d) 20
(i) What is MP at 3rd unit of labour?
(a) 22 (b) 12
(c) 36 (d) 14
(ii) The given schedule indicates the phase of:
(a) Diminishing Returns to a Factor (b) Increasing Returns to a Factor
(c) Negative Returns to a Factor (d) None of these
28. What is the maximum point of TP?
(a) When AP becomes zero (b) When MP becomes zero
(c) When MP cuts AP (d) None of these
29. Average Product can have:
(a) Positive values only (b) Negative values only
(c) Both positive as well as negative values (d) Neither positive nor negative values
30. Which of the following is correct?
(a) When MP is positive and falling, TP rises at a decreasing rate.
(b) When MP is rising, TP rises at an increasing rate.
(c) When MP is negative, TP rises.
(d) All of these
31. At the Pointof Inflexion:
(a) Total Product is maximum (b) Average Product is
(c) Marginal PrOduct is maximum
maximum
(d) Marginal Product is zero
32. When APfalls due to increase in quantity of variable input:
(a) MP<AP (b) MP= AP
(c) MP>AP (d) None of these
ProductionFunction 5.29

Lawof deals with input-output relationship, when the output is increased by varying
33. The
one input.
the quantity of
(a) Variable Proportions (b) Supply
(c) Demand (d) Equi-marginalutility
keeping other
34. According toLaw of Variable Proportions, when we increase quantity of only one input
inputs fixed. initially increases at an increasing rate, then at a decreasing rate and finally
rate.
at a negative (b) Average Product
(a) Total Product
(c) Marginal Product (d) None of these
Proportions?
6 Which of the following is not a phase in the Law of Variable to a factor
afactor (b) Constant returns
(a) Increasing returns to
(c) Diminishing returns to a factor (d) Negative returns to a factor
total output generated by the first four units of variable input is 200 units, 350 units, 450 units and
36. The
500 units. The marginal product of the third unit of input is:
(b) 100 units
(a) 50 units
(d) 200 units
(c) 150 units
factor is 16 units,
If TP of employing one unitof variable factor is 12 units and that of 2 units of variable
37.
factor is:
the marginal product of 2 units of variable (b) 4 units
(a) 3 units
(d) 16 units
(c) 8 units
statement showing the relationship between AP and MP?
38. Which of the following is correct
AP/(in
MP units)

AP
X
MP
Units of Variable
factor
(b) When MP = AP, AP is constant
(a) When MP> AP, AP increases (d) Allof these
(c) When MP < AP, AP falls
39. "Point of Inflexion' is represented by:
(in
TPunits)
M
S
TP

X
Variable
(in
MPunits) Input

MP
Variable lnput
5.30 Introductory Microeconomics
(a) Point M (b) Point Q
(c) Point R (d) Point S
When marginal product rises, total product: (Choose the correct alternative)
(a) Falls (b) Rises
(c) Can rise or can fallI (d) Remains constant
41. The average product curve in the input-output plane, will be (Choose the correct
alternative)
(a) an 'S' shaped curve
(c) a U' shaped curve (b) an inverse 'S shaped curve
(d) an inverse U' shaped curve