Producer Behaviour and Supply Test

Result

Producer Behaviour and Supply Test - 3

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Weekly Quiz Competition

Question 1
1 / -0

Marginal Revenue is

A
Addition to the total revenue on the sale of an additional unit of Output

B
Addition to the total revenue on the production of an additional unit of Output

C
Addition to the total revenue on the sale of an additional unit of Output

D
Additional cost involved in production

Solution

MR_n = TR_n − T R_n−1
Question 2
1 / -0

Variable costs vary with output because

A
It changes on its own

B
It does not remain constant in the long run

C
It is impossible to keep them fixed

D
It varies as it is the expenditure on the variable factors which can be changed in the short run

Solution

in the short run with increase or decrease in production, the variable factors are changed accordingly. for eg. labour, raw materials.
Question 3
1 / -0

Average cost is derived by

A
Subtracting Total Cost by units of output

B
Dividing Total Cost by units of output

C
Multiplying Total Cost by units of output

D
Adding Total Cost by units of output

Solution

It refers to the per unit cost of production.

AC=TC÷Q
Question 4
1 / -0

Explain the relationship TC, TFC & TVC.

A
TVC+TFC= TC

B
TVC-TFC= TC

C
TVC X TFC= TC

D
TVC/TFC=TC

Solution

TC is the sum of total fixed cost and total variable cost at various levels of output. Since TFC remains same at all levels of output , the change in TC is entirely due to TVC. Therefore the vertical distance between TC and TFC curve is equal to TVC.
Question 5
1 / -0

Diagrammatically AC has a U shape. The statement is

A
May be

B
May not be

C
True

D
FALSE

Solution

The AC curve is U shaped as it initially falls with increase in output. Once the output rises till optimum level, AC starts rising.
Question 6
1 / -0

The relationship between AC & MC is

A
AC continues to fall till MC is less than AC

B
AC continues to fall till MC is equal to AC

C
AC continues to rise till MC is less than AC

D
AC continues to fall till MC is greater than AC

Solution

When MC <AC , AC falls

When MC=AC , AC is constant and at ita minimum point

When MC> AC, AC rises
Question 7
1 / -0

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 as TFC can never be zero

C
AFC curve can never be extended to touch zero with increase in output

D
AFC is always vertical

Solution

There is always an element of TFC even at zero kevel of output. Because of this reason AFC can never be zero and though it kies close to the X axus it can never touch the X axis.
Question 8
1 / -0

AVC and AFC always lie below AC because

A
They are concave

B
They are convex

C
Their sum is equal to AC

D
They are always downward sloping

Solution

AC curve will always lie above the AVC and AFC curve because AC , at all levels of output includes both AVC and AFC.
Question 9
1 / -0

TVC curve starts from origin as

A
TVC is horizontal

B
TVC is zero at zero level of output

C
TVC is vertical curve from origin

D
TVC slopes upward from the origin at higher level of output

Solution

TVC directly varies with the level of output. When there is no output, TVC will be zero, as at zero level of output, no raw materials will be needed, no labour charges have to be paid etc. So there will be no variable cost at zero level of output.
Question 10
1 / -0

When TVC is zero at zero level of output, TFC

A
Is positive and equal to zero

B
Is positive and less than zero

C
Is positive and greater than zero

D
Is negative but greater than zero

Solution

TFC will always be incurred even at zero level of output. So, even at zero level of output , TFC will be greater than zero as they involve payments like salary, electricity charges, telephone charges etc .

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Re-Attempt Weekly Quiz Competition

Producer Behaviour and Supply Test - 3

Result

Producer Behaviour and Supply Test - 3

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Rank

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SHARING IS CARING

Question 1

Addition to the total revenue on the sale of an additional unit of Output

Addition to the total revenue on the production of an additional unit of Output

Addition to the total revenue on the sale of an additional unit of Output

Additional cost involved in production

Solution

Question 2

It changes on its own

It does not remain constant in the long run

It is impossible to keep them fixed

It varies as it is the expenditure on the variable factors which can be changed in the short run

Solution

Question 3

Subtracting Total Cost by units of output

Dividing Total Cost by units of output

Multiplying Total Cost by units of output

Adding Total Cost by units of output

Solution

Question 4

TVC+TFC= TC

TVC-TFC= TC

TVC X TFC= TC

TVC/TFC=TC

Solution

Question 5

May be

May not be

True

FALSE

Solution

Question 6

AC continues to fall till MC is less than AC

AC continues to fall till MC is equal to AC

AC continues to rise till MC is less than AC

AC continues to fall till MC is greater than AC

Solution

Question 7

AFC is horizontal

AFC can never be zero as TFC can never be zero

AFC curve can never be extended to touch zero with increase in output

AFC is always vertical

Solution

Question 8

They are concave

They are convex

Their sum is equal to AC

They are always downward sloping

Solution

Question 9

TVC is horizontal

TVC is zero at zero level of output

TVC is vertical curve from origin

TVC slopes upward from the origin at higher level of output

Solution

Question 10

Is positive and equal to zero

Is positive and less than zero

Is positive and greater than zero

Is negative but greater than zero

Solution

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