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
Diagrammatically AC has a U shape. The statement is
  • A
    May be
  • B
    May not be
  • C
    1
    Correct
  • D
    FALSE
2
The relationship between AC & MC is
  • A
    AC continues to fall till MC is greater than AC
  • B
    AC continues to rise till MC is less than AC
  • C
    AC continues to fall till MC is equal to AC
  • D
    AC continues to fall till MC is less than AC
    Correct
3
AFC curve never touches ‘x’ axis though it lies very close to x axis because
  • A
    AFC is horizontal
  • B
    AFC can never be zero
    Correct
  • C
    AFC curve can never be extended to touch zero with increase in output
  • D
    AFC is always vertical
4
AVC and AFC always lie below AC because
  • A
    They are convex
  • B
    Their sum is equal to AC
    Correct
  • C
    They are concave
  • D
    They are always downward sloping
5
TVC curve starts from origin as
  • A
    TVC slopes upward from the origin at higher level of output
  • B
    TVC is zero at zero level of output
    Correct
  • C
    TVC is vertical curve from origin
  • D
    TVC is horizontal
6
When TVC is zero at zero level of output, TFC
  • A
    Is positive and greater than zero
    Correct
  • B
    Is positive and less than zero
  • C
    Is negative but greater than zero
  • D
    Is positive and equal to zero
7
TFC is not zero at zero level of output as
  • A
    It can never be negative
  • B
    There is an employment of fixed factors at zero level of output
    Correct
  • C
    There cannot be any employment of fixed factors at zero level of output
  • D
    There are no fixed factors at zero level of output
8
Can MR be negative or zero?
  • A
    No
  • B
    May be
  • C
    Yes
    Correct
  • D
    May not be
9
The relationships between AR and MR is when price falls is
  • A
    AR falls but MR rises
  • B
    AR rises but MR falls
  • C
    Both decline with sales
    Correct
  • D
    Both rise in sales
10
The relationships between TR and MR when price fall is
  • A
    TR rises but MR falls
  • B
    Both rise in sales
  • C
    TR rises and then fall but MR falls with sales
    Correct
  • D
    TR falls but MR rises
11
The break- even point is
  • A
    MR<MC
  • B
    MR=MC=0
  • C
    MR=MC
    Correct
  • D
    MR>MC
12
Where does breakeven point lie in a diagram?
  • A
    MC curve intersects MR curve from below
    Correct
  • B
    MC curve intersects MR curve from above
  • C
    MR curve intersects MR curve from above
  • D
    MR curve intersects MC curve from below
13
The situation of ‘abnormal profits’ arise for a firm when
  • A
    MR=MC
  • B
    MR=MC=0
  • C
    MR is greater than MC
  • D
    MC is less than MR
    Correct
14
The situation of ‘normal profits’ arise for a firm when
  • A
    MR greater than MC
  • B
    MR is less than MC
  • C
    MR=MC=0
  • D
    MC = MR
    Correct
15
What happens to TR when MR is increasing
  • A
    Decreases at increasing rate
  • B
    Increases at decreasing rate
  • C
    Decreases at decreasing rate
  • D
    Increases at increasing rate
    Correct