Production-1

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1. Economic rent refers to-
(A) Payment made for the use of land
(B) Profit
(C) Producer’s surplus
(D) Consumer’s surplus
Ans. (A)

2. The Marginal Utility Curve slopes downward from left to right indicating-
(A) A direct relatiosnhip between marginal utility and the stock of commodity
(B) A constant relationship between marginal utility and the stock of commodity
(C) A proportionate relationship between marginal utility and the stock of commodity
(D) An inverse relationship between marginal utility and the stock of commodity
Ans. (D)

3. Enterpreneurial ability is a special kind of labour that-
(A) Is hired out to firms at high wages
(B) Organises the process of production
(C) Produce new capital goods to earn interest
(D) Manages to avoid losses by continual
Ans. (B)

4. When marginal utility is zero, the total utility is-
(A) Minimum
(B) Increasing
(C) Maximum
(D) Decreasing
Ans. (C)

5. Operating Surplus arises in the-
(A) Government Sector
(B) Production for self consumption
(C) Subsistance farming
D) Enterprise Sector
Ans. (D)

6. The fixed cost on such factors of production which are neither hired nor bought by the firmis called-
(A) Social cost
(B) Opportunity cost
(C) Economic cost
(D) Surcharged cost
Ans. (A)

7. Given the money wages, if the price level in an economy increases, then the real wages will-
(A) Increase
(B) Decrease
(C) Creating utility
(D) Become flexible
Ans. (B)

8. According to modern thinking the law of diminshing returns applies to-
(A) Agriculture
(B) Industry
(C) Mining
(D) All fields of production
Ans. (D)

9. Which is the most essential function of an entrepreneur?
(A) Supervision
(B) Management
(C) Marketing
(D) Risk bearing
Ans. (D)

10. Knowledge, technical skill, education etc, in economics, are regarded as-
(A) Social-overhead capital
(B) Human capital
(C) Tangible physical capital
(D) Working capital
Ans. (B)

11. Production function expresses-
(A) Technological relationship between physcial
inputs and output
(B) Financial relationship between physical input and output
(C) Relationship between finance and technology
(D) Relationship between factors of production
Ans. (A)

12. “Interest is a reward for parting with liquidity” is according to-
(A) Keynes
(B) Marshall
(C) Haberler
(D) Ohlin
Ans. (A)

13. Labour Intensive Technique would get chosen in a-
(A) Labour Surplus Economy
(B) Capital Surplus Economy
(C) Developed Economy
(D) Developing Economy
Ans. (A)

14. The value of a commodity expressed in terms of money is known as-
(A) Price
(B) Utility
(C) Value
(D) Wealth
Ans. (A)

15. Division of labour is limited by-
(A) The number of workers
(B) Hourse of work
(C) Extent of the market
(D) Working space
Ans. (C)

16. It is prudent to determine the size of the output when the industry is operating in the stage of-
(A) Increasing returns
(B) Constant returns
(C) Diminishing returns
D) Negative returns
Ans. (C)

17. Exploitation of labour is said to exist when-
(A) Wage = Marginal Revenue
(B) Wage < Marinal Revenue Product (C) Wage > Marinal Revenue Product
(D) Marginal Revenue Product = 0
Ans. (B)

18. Cost of production of the producer is given by-
(A) Sum of wages paid to labourers
(B) Sum of wages and interest paid on capital
(C) Sum of wages, interest rent and supernormal profit
(D) Sum of wages, interest, rent and normal profit
Ans. (D)

19. Wage fund theory was pro-pound(SSC (10+2) Level DEO & LCD 2011) : Cost of pre payment for land, Labour, capital and entrepreneur ined by-
(A) J.B. Say
B) J.S. Mill
(C) J.R. Hicks
(D) J.M. Keynes
Ans. (B)

20. Real wage is-
(A) Profit Price level
(B) Rent Price level
(C) Interest Price level
(D) Money wage Price level
Ans. (D)

21. Plant and machinery are-
(A) Producer’s goods
(B) Consumer’s goods
(C) Distributor’s goods
(D) Free goods
Ans. (A)

22. The remuneration of the entrepreneur in production is-
(A) Pure profit
(B) Gross profit
(C) Net profit
(D) Super-normal profit
Ans. (C)

23. The basic objective of all production is to-
(A) Satisfy human wants
(B) Provide employment
(C) Make profits
(D) Increase physical output
Ans. (A)

24. Third stage of law of Variable proportion is called-
(A) Negative returns
(B) Positive returns
(C) Constant returns
(D) Increasing returns
Ans. (A)

25. Minimum payment to factor of production is called-
(A) Quasi Rent
(B) Rent
(C) Wages
(D) Transfer payment
Ans. (D)

26. Returns to scale is a-
(A) Timeless phenomenon
(B) Directionless phenomenon
(C) Short-run phonomenon
(D) Long run phenonmenon
Ans. (D)

27. Consumer gets maximum satisfaction at the point where-
(A) Marginal Utility = Price
(B) Marginal Utility > Price
(C) Marginal Utility < Price (D) Marginal Cost = Price Ans. (A) 28. Production refers to- (A) Destruction of utility (B) Creation of utilities (C) Exchange value (D) Use of a product Ans. (B) 29. The law of diminishing returns applies to- (A) All sectors (B) Industrial sector (C) Agriculture sector D) Service sector Ans. (A) 30. The study of factor pricing is alternatively called the theroy of- (A) Functional distribution (B) Personal distribution (C) Income distribution (D) Wealth distirbution Ans. (A) 31 The internal rate of return- (A) Must be less than the interest rate if the firm is to invest (B) Makes the present value of profits equal to the present value of costs (C) Falls as the annual yield of an investment rises (D) Is equal to the market interest rate for all the firm is investment Ans. (B) 32. Which of the following occurs when labour productivity rises? (A) The equilibrium nominal wage falls (B) The equilibrium quantity of labour falls (C) Competitive firms will be induced to use more apital (D) The labour demand curve shifts to the right Ans. (D) 33. Economics classifies the manmade instrument of production as- (A) Organization (B) Capital (C) Equipment (D) Labour Ans. (D) 34. ‘Marginal efficiency of capital’s- (A) Expected rate of return of new investment (B) Expected rate of return of existing investment (C) Difference between rate of profit and rate of interest (D) Value of output per unit of capital invested Ans. (A) 35. Capital output ratio of a commodity measures- (A) Its per unit cost of production (B) The amount of capital invested per unit of output (C) The ratio of capital depreciation to quantity of output (D) The ratio of working capital employed to quantity of output Ans. (B) 36. Investment is equal to- (A) Gross total of all tutput ratio is a measure to show the amount of capital needypes of ed for one unit of production. In other words, it is amount of capiphyscial capital assets (B) Gross total of all capital assets minus wear and tear (C) Stock of plant, machines and equipments (D) None of these Ans. (B) 37. In a business, raw materials, components, work in progress and finished goods are jointly regarded as- (A) Capital stock (B) Inventory (C) Investment (D) Net worth Ans. (B) 38. While determining income the expenditure on which of the following items is not considered as investment? (A) Construction of factory (B) Computer (C) Increase in the stock of unsold articles (D) Stock and share in joint stock company Ans. (C) . 39. Who defined investment as “the construction of a new capital asset like machinery or factory building? (A) Hansen (B) J.M. Keynes (C) Harrod (D) J.R. Hicks Ans. (B) 40. The demand for money, according to Keynes, is for- (A) Speculative motive (B) Transaction motive (C) Precautionary motive (D) All the above motives Ans. (D) 41. If a change in all inputs lead in a proportionate change in output it is case of (A) Constant returns to scale (B) Diminishing returns to scale (C) Increasing returns to scale (D) Variable returns to scale Ans. (A) 42. One of the following is Labour’ in Economics- (A) A Musician performing for a benefit fund (B) A Painter working for his own pleasure (C) Reading a book as a hobby (D) A Mother teaching her own son Ans. (A)

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