Micro Economics Quiz 2 MCQs

Indian Institute of Management Kozhikode Quiz 2

Course Title Instructor Duration Maximum Marks Date & Time

Managerial Economics Prof. Leena Mary Eapen 10 minutes 10 11/2/12 10.00-10.10pm

1. With With a given plant plant size, size, an increas increasee in the output output cannot cannot produce produce an increas increasee in a) Total cost  b) Average fixed cost c) Aver Averag agee tot total al cost cost d) Aver Averag agee vari variab able le cos costt 2. When When a)  b) c) d)

Margi Marginal nal product product is highes highestt Tota Totall prod produc uctt is maxi maximu mum m Marginal cost is maximum Marg Margin inal al cost cost is zero zero Marg Margin inal al cost cost is is mini minimu mum m

3. When When a)  b) c) d)

avera average ge prod product uct is highes highestt Margin Marginal al produc productt is is maximu maximum m Marginal product is zero Margin Marginal al produc productt is equal equal to avera average ge produc productt Margin Marginal al produc productt is below below averag averagee product product

4. If a change change in all inputs inputs leads leads to a proporti proportional onal change change in the output, output, it is is a case of  a) Econ Econom omie iess of scal scalee  b) Constant economies of scale c) Vari Variab able le ret retur urns ns to to scal scalee d) Consta Constant nt return returnss to to scal scalee 5. The aver average age cost cost will will be mini minimum mum at a point point where where a) Marginal Marginal cost and average average cost curves intersect intersect  b) Marginal cost and average fixed cost curves intersect c) Marg Margin inal al cos costt is mini minimu mum m d) Averag Averagee variab variable le cost cost is is minim minimum um 6. Aver Averag agee fix fixed ed cost cost a) Alwa Always ys dec decli lines nes as the the out output put incr increa ease sess  b) Is U-shaped, if there are increasing returns to scale c) Is U-s U-shape haped, d, if if there there are are decr decreas easing ing retu returns rns to scal scalee d) None of the above 7. Knowledge Knowledge of fixed fixed costs costs and variable variable costs costs enable enable one to determine determine which which of the the following following a) Aver Averag agee cos costts  b) Average total cost 1

c) Marginal cost d) All of the above 8. A distinguishing characteristic of the long run period is that a) All costs are fixed costs  b) All costs are variable costs c) Fixed costs tend to be greater than variable costs d) Fixed costs tend to be lesser than variable costs 9. To produce 500 units of output total cost incurred is Rs 2500. To produce 502 units of output the total cost incurred is Rs 2520, Marginal cost of production is a) 1  b) 5 c) 10 d) 15 `

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10. Cost function of a firm is estimated to be TC= 500 + Q3 - Q2 + 100Q. Fixed cost for the firm is a) 500  b) 50000 c) 100 d) None of the above

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