Unit 3 - Principles of Economics - BBA 1st Sem
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1
What is the primary focus of Production in Economics?
Correct!
Wrong :(
Answer - C
Description: Production in economics primarily concerns the generation of output, goods, or services.
2
Which of the following is NOT a factor of production?
Correct!
Wrong :(
Answer - D
Description: Demand is not a factor of production; it represents the desire for goods and services.
3
The Production Function relates:
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Answer - B
Description: The production function relates inputs (factors of production) to the quantity of output produced.
4
According to the Law of Diminishing Returns, when one input is increased while keeping others constant, what happens to output?
Correct!
Wrong :(
Answer - B
Description: The Law of Diminishing Returns states that as one input is increased while keeping others constant, the output will eventually decrease.
5
The Laws of Production include:
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Answer - B
Description: The Laws of Production include the Laws of Increasing Returns and Constant Returns.
6
When production exhibits constant returns to scale, what happens to output as all inputs are increased proportionally?
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Answer - C
Description: Constant returns to scale mean that output remains constant when all inputs are increased proportionally.
7
Equal Product Curves show the relationship between:
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Answer - C
Description: Equal Product Curves depict input combinations that yield the same level of output.
8
What is the key objective of a producer in achieving equilibrium?
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Answer - C
Description: The primary objective of a producer in achieving equilibrium is to maximise profits.
9
In producer equilibrium, marginal cost is equal to:
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Answer - A
Description: In producer equilibrium, marginal cost equals marginal revenue to maximize profit.
10
Which concept focuses on the additional cost incurred by producing one more unit of output?
Correct!
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Answer - C
Description: Marginal cost is the additional cost of producing one more unit of output.
11
The point where total cost and total revenue intersect is called:
Correct!
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Answer - B
Description: The point where total cost and total revenue intersect is known as the break-even point.
12
What does the Law of Increasing Returns state?
Correct!
Wrong :(
Answer - A
Description: The Law of Increasing Returns states that as production increases, the average cost per unit decreases.
13
Which of the following is an example of a variable factor of production?
Correct!
Wrong :(
Answer - B
Description: Raw materials are typically considered a variable factor of production, as their quantity can be adjusted easily.
14
Producer equilibrium is achieved when:
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Wrong :(
Answer - C
Description: Producer equilibrium is reached when marginal cost equals marginal revenue.
15
The production function helps a firm determine:
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Answer - C
Description: The production function helps a firm determine the best combination of inputs to maximise output.
16
What is the main purpose of equal product curves?
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Wrong :(
Answer - C
Description: Equal product curves illustrate the relationship between inputs and outputs.
17
Which law of production is associated with the idea that more cooks in the kitchen can spoil the broth?
Correct!
Wrong :(
Answer - B
Description: The Law of Diminishing Returns implies that adding more input can lead to diminishing returns.
18
What is the goal of a firm when it comes to production and cost?
Correct!
Wrong :(
Answer - C
Description: The goal of a firm is to minimise costs while maximising output to maximise profit.
19
In economics, what is the typical relationship between cost and output in the short run?
Correct!
Wrong :(
Answer - B
Description: In the short run, costs typically increase proportionally with output due to diminishing returns.
20
What does the Law of Constant Returns state?
Correct!
Wrong :(
Answer - B
Description: The Law of Constant Returns states that as production increases, the average cost per unit remains constant.
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