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

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bAverage cost falls

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cVariable cost rises by Rs100

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dAverage fixed cost is Rs10

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The average variable cost curve ?


ais derived from the average fixed costs

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bConverges with the average cost as output increases

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cEquals the total costs divided by the output

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dEquals revenue minus profits

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When internal economies of scale occur ?


aTotal costs fall

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bMarginal costs increase

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cAverage costs fall

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d Revenue falls

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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

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bMarginal utility falls as more unity of a product are consumed

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

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

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Any combination of products inside the production possibility frontier is ?


aAllocatively inefficient

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bX inefficient

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cConsumer inefficient

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dProductively inefficient

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The resources in the economy do not include ?


aDemand

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b Land

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cLabour

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dCapital

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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

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b 10As

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c3As

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d1A

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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

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bA movement along the production possibility frontier

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cAn outward shift of the production possibility frontier

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dThe pivoting of the production possibility frontier

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If an economy is productively efficient ?


aEveryone is wealthy

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bResources are unemployed

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

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dThe distribution of income is eqal

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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.

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

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

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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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