costs mcq with answers

8/13/2019 Costs MCQ With Answers

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Chapter 6: The Costs of Production


Multiple Choice Questions

THE PRODUCTION FUNCTION

1. hich of the fo!!o"in# are factors of production$%& Output in a production function. C& 'and( !a)or( capita!( and entrepreneurship.*& Producti+it,. D& %!! of the a)o+e.

%ns"er: C T,pe: Definition Pa#e: 1-

-. % production function:

%& /ho"s the cost of producin# an, !e+e! of output.*& Is a techno!o#ica! re!ationship )et"een factors of production and output.C& E0presses the !eastcost 2ethod of producin# a #i+en !e+e! of output.D& E0presses our a)i!it, to produce +arious co2)inations of #oods( usin# a!! of our resources.

%ns"er: * T,pe: Definition Pa#e: 1-

3. % production function 2atches a #i+en co2)ination of factor inputs "ith the:%& 'o"est a+era#e cost of producin# the output.*& 4a0i2u2cost 2ethod for co2)inin# the inputs.C& 'east cost of producin# output.D& 4a0i2u2 output that can )e techno!o#ica!!, produced fro2 the inputs.

%ns"er: D T,pe: Definition Pa#e: 1-

5. % production function sho"s the:%& 4ini2u2 a2ount of output that can )e o)tained fro2 a!ternati+e co2)inations of inputs.*& 4a0i2u2 uantities of inputs reuired to produce a #i+en uantit, of output.C& 4a0i2u2 output "e can produce "ith +ar,in# co2)inations of factor inputs.D& Output capacit, of the entire econo2,.


. hich of the fo!!o"in# state2ents is true a)out the production function$%& It represents 2a0i2u2 technica! efficienc,.*& It represents the 2ost output attaina)!e fro2 an, co2)inations of factor inputs.C& It descri)es the output capacit, of a sin#!e fir2.D& %!! of the a)o+e.

%ns"er: D T,pe: *asic Understandin# Pa#e: 1-

Pa#e 1


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6. /uppose "e can descri)e the production function for the 4C /hoe Co. "ith the euation( TP 7 8' 9"here' 7 the nu2)er of "orers&. *ased on this infor2ation( "hich of the fo!!o"in# state2ents is true$%& The 4C /hoe Co. "i!! ne+er e0perience econo2ies of sca!e.*& The !a" of di2inishin# returns does not app!, at the 4C /hoe Co.C& Di2inishin# returns )e#in after the se+enth "orer.D& The 2ar#ina! ph,sica! product cur+e )eco2es ne#ati+e at 8 "orers.

%ns"er: * T,pe: Co2p!e0 Understandin# Pa#e: 1-

8. ;reater !a)or producti+it, 2eans:%& 'o"er output per !a)or hour. C& 'o"er output per "orer.*& Hi#her !a)or cost per unit of output. D& Hi#her output per "orer.

%ns"er: D T,pe: *asic Understandin# Pa#e: 1-6


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1-. Technica! efficienc,:%& Reuires #ettin# 2a0i2u2 output fro2 the resources used in production.*& Reuires co+erin# the opportunit, costs of the resources used in production.C& Reuires production )e,ond the production function.D& %!! of the a)o+e.

%ns"er: % T,pe: Definition Pa#e: 1-6

13. hen a fir2 produces at a technica!!, efficient output !e+e!( it is:%& Producin# the output at the 2ini2u2MCcur+e.*& Usin# the fe"est resources to produce a #ood or ser+ice.C& Producin# the output "here theAVCcur+e is at a 2ini2u2.D& Producin# the )est co2)ination of #oods and ser+ices.

%ns"er: * T,pe: *asic Understandin# Pa#e: 1-6

15. The 2ost desired #oods and ser+ices that are #i+en up in order to #et 2ore of another #ood is the:%& %+era#e tota! cost. *& @aria)!e cost. C& 4ar#ina! cost. D& Opportunit, cost.

%ns"er: D T,pe: *asic Understandin# Pa#e: 1-6

1. Decisions "hich treat at !east one factor of production as fi0ed are referred to as:%& 'on#run decisions. *& /hortrun decisions. C& Efficienc, decisions. D& In+est2ent decisions.

%ns"er: * T,pe: Definition Pa#e: 1-6

16. The period in "hich at !east one input is fi0ed in uantit, is the:%& 'on# run. *& Production run. C& /hort run. D& In+est2ent decision.

%ns"er: C T,pe: Definition Pa#e: 1-8

4%R;IN%' PRODUCTI@ITA

18. 4ar#ina! ph,sica! product is:%& Tota! output di+ided ), the uantit, of input.*& Input di+ided ), output.C& The chan#e in tota! output di+ided ), the chan#e in input uantit,.D& The chan#e in producti+it, associated "ith an additiona! unit of input.


costs mcq with answers

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