Production And Costs CBSE Questions & Answers

Production And Costs

This is Economics Class 12 Production and Costs CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
opportunity cost is the
  • A
    Next best alternative available
  • B
    Next best alternative sacrificed
    Correct
  • C
    Next best alternative produced
  • D
    Next best alternative chosen
2
The difference you find between fixed and variable costs
  • A
    Both do not change with output
  • B
    Both change with output
  • C
    Fixed cost does not change with output but variable cost does
    Correct
  • D
    Fixed cost changes with output but variable cost does not
3
Revenue for a firm is
  • A
    Money spent on producing output
  • B
    Money receipts from the sale of output
    Correct
  • C
    Average price of a product sold
  • D
    Addition to Total revenue after a good is sold
4
Average Revenue(AR) is
  • A
    Sum of Total Revenue and price
  • B
    Total Revenue per unit of output
    Correct
  • C
    Total revenue per unit of inputs used
  • D
    Total cost per unit produced
5
The law of supply explains a
  • A
    Positive relationship between Price of a commodity and quantity supplied
    Correct
  • B
    Positive relationship between Price of a commodity and supply
  • C
    Positive relationship between Price of a commodity and market supply
  • D
    Negative relationship between Price of a commodity and quantity supplied
6
Market supply is best defined as
  • A
    Horizontal summation of all individual quantity supplied at various prices
    Correct
  • B
    Horizontal summation of all individual quantity supplied at a given price
  • C
    Vertical summation of all individual quantity supplied at various prices
  • D
    Vertical summation of all individual quantity supplied at a given price
7
The supply curve of a firm shows
  • A
    Graphical representation of quantity supplied at various profit levels
  • B
    Graphical representation of quantity supplied at various prices
    Correct
  • C
    Graphical representation of quantity supplied at keeping prices constant
  • D
    Graphical representation of quantity supplied at a particular price only
8
The elasticity of supply measures
  • A
    The quantity supplied at a price
  • B
    The difference in quantity supplied when price fall
  • C
    The initial quantity supplied at the initial price
  • D
    The degree of responsiveness of quantity supplied at a particular price
    Correct
9
A supply schedule is best defined as
  • A
    Tabular representation of quantity supplied at various profit levels
  • B
    Tabular representation of quantity supplied at keeping prices constant
  • C
    Tabular representation of quantity supplied at various prices
    Correct
  • D
    Graphical representation of quantity supplied at a particular price only
10
Marginal Revenue is
  • A
    Addition to the total revenue on the sale of an additional unit of Output
    Correct
  • B
    Same as total revenue
  • C
    Additional cost involved in production
  • D
    Addition to the total revenue on the production of an additional unit of Output
11
The fixed cost curve is a horizontal straight line to the X axis because
  • A
    It is impossible to change
  • B
    It remains constant in the short run
    Correct
  • C
    IT remains same even if fixed factors change
  • D
    It remains constant in the long run
12
Variable costs vary with output because
  • A
    It changes on its own
  • B
    It does not remain constant in the long run
  • C
    It varies as it is the expenditure on the variable factors which can be changed in the short run
    Correct
  • D
    It is impossible to keep them fixed
13
Average cost is derived by
  • A
    Subtracting Total Cost by units of output
  • B
    Dividing Total Cost by units of output
    Correct
  • C
    Adding Total Cost by units of output
  • D
    Multiplying Total Cost by units of output
14
AVC, AFC & ATC are related in a way that
  • A
    \({{AVC} \over {AFC}}\)= ATC
  • B
    AVC+AFC= ATC
    Correct
  • C
    AVC-AFC= ATC
  • D
    AVC X AFC= ATC
15
Explain the relationship TC, TFC & TVC.
  • A
    TVC+TFC= TC
    Correct
  • B
    TVC X TFC= TC
  • C
    TVC-TFC= TC
  • D
    \({{TVC} \over {TFC}}\)=TC