General Economics GK online MCQ practice set

Q41. Returns to scale refers to the production function where

A. All factors are fixed
B. Some factors are fixed and others are variable
C. All factors are variable
D. None of the above

Q42. In the case of diminishing returns to scale, a given proportionate increase in all factors causes

A. A more than proportionate increase in output
B. An equal proportionate increase in output
C. A less than proportionate increase in output
D. None of the above

Q43. Increasing returns to scale occurs due to

A. Division of labour
B. Specialization
C. Economies of scale
D. All of the above

Q44. The cause for diminishing returns to scale is:

A. Improper proportion of factors of production
B. Difficulty in the combination of certain factors
C. Excess combination of certain factors
D. All of the above

Q45. The solution to diminishing returns to scale is:

A. Technical progress
B. Expansion of resources
C. Proper combination or resources
D. All of the above

Q46. Economies of scale refers to:

A. Advantages resulting from large scale production
B. Disadvantages resulting from large scale production
C. Advantages resulting from the increase in the number of consumers
D. All of the above

Q47. Which one of the following is not related to economies of scale:

A. Scope for division of labour and specialization
B. Scope for getting inputs at cheaper rates
C. Difficulty faces by the managers to coordinate the business
D. Scope for better storage facilities

Q48. The law of Diminishing returns is applicable to:

A. Agriculture only
B. Industry only
C. In short-run only
D. Universally

Q49. Let a firm employs 5 labourers and produces 120 units of output. When 6 labourers are employed the firm produces 136 units of output. Then the marginal product is—

A. 120
B. 136
C. 6
D. 16

Q50. A firm produces 200 units of commodity X by employing 10 workers and 240 units of the same commodity by employing 12 workers. Then the Average Product of the worker is—

A. 200
B. 240
C. 20
D. 40

Q51. Other things remaining the same, the quantity of a product demanded increases with— in price.

A. Increase
B. Decrease
C. Variation
D. None of the above

Q52. When total utility is maximum, marginal utility is:

A. Maximum
B. One
C. Zero
D. Infinite

Q53. For complementary goods, the cross elasticity of demand:

A. Positive
B. Negative
C. Zero
D. None

Q54. Relation between price of a commodity and demand for another commodity is measured by:

A. Price elasticity
B. Income elasticity
C. Cross elasticity
D. Elasticity of substitution

Q55. When TU falls, MU is:

A. Rises
B. Zero
C. Positive
D. Negative

Q56. Demand varies— with price.

A. Directly
B. Positively
C. Inversely
D. None of the above

Q57. When Q = f (P), the elasticity coefficient is measured by:

A. ?Q/?P / P/Q
B. ?P/?Q * Q/P
C. ?Q/?P * P/Q
D. ?P/?Q / Q/P

Q58. Income elasticity of demand for inferior good is:

A. Negative
B. Positive
C. Zero
D. Unity

Q59. In the case of luxury goods, the income elasticity of demand will be:

A. Less than unity
B. Unity
C. More than unity
D. All the above

Q60. Income elasticity is positive, but less than unity in the case of:

A. Necessity
B. Luxury
C. Inferior
D. Substitutes