Economics MCQs

Page No. 284

Total increases from Rs500 to Rs600 when output increases from 20 to 30 units. Fixed costs are Rs200 Which of the following is true ?


aMarginal cost is Rs20


bAverage cost falls


cVariable cost rises by Rs100


dAverage fixed cost is Rs10



The average variable cost curve ?


ais derived from the average fixed costs


bConverges with the average cost as output increases


cEquals the total costs divided by the output


dEquals revenue minus profits



When internal economies of scale occur ?


aTotal costs fall


bMarginal costs increase


cAverage costs fall


d Revenue falls


View Answer Average costs fall

According the law of diminishing returns ?


aThe marginal product fall as more units of a variable factor are added to a fixed factor


bMarginal utility falls as more unity of a product are consumed


cthe total product falls as more units of a variable factor are added to a fixed factor


dThe marginal product increases as more units of a variable factor are added to a fixed factor



Any combination of products inside the production possibility frontier is ?


aAllocatively inefficient


bX inefficient


cConsumer inefficient


dProductively inefficient



The resources in the economy do not include ?


aDemand


b Land


cLabour


dCapital


View Answer Demand

If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs The opportunity cost of the 5th B is ?


a7As


b 10As


c3As


d1A


View Answer 3As

As resources are shifted from one industry to another this can be shown by ?


aAn inward shift of the production possibility frontier


bA movement along the production possibility frontier


cAn outward shift of the production possibility frontier


dThe pivoting of the production possibility frontier



If an economy is productively efficient ?


aEveryone is wealthy


bResources are unemployed


c More of one product can only be produced if less of another product is produced


dThe distribution of income is eqal



Which of the following is a problem for monetary policy in a currency union ?


aMoney supply is more difficult to control in a currency union.


bThe inflation-unemployment trade-off is more unstable in a currency union


c All of these answers describe problems for monetary policy in a currency union


dThe interest rate may be higher than is appropriate for economic conditions in some countries while it’s lower than is appropriate in some others monetary policy must be one size fits all



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