Producer Behaviour and Supply Test

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Producer Behaviour and Supply Test - 2

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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
Additional cost involved in production

D
Same as total revenue

Solution

MRn=TRn−TRn−1
Question 2
1 / -0

In short run which of the following factors can be changed easily

A
Variable factors

B
Fixed factors

C
All the factors

D
None

Solution

In the short run variable factors like labour, raw materials can be changed easily. It is difficult to change fixed factors like land, machinery, equipments, etc in the short period as procuring/selling land or machinery or capital will take time and it is difficult to change them in the short period.
Question 3
1 / -0

Production function shows technical relationship between physical inputs and output of a commodity

A
Technological relationship between inputs and output

B
Technological relationship between inputs and cost

C
Economic relationship between inputs and output

D
Technological relationship between inputs and price

Solution

Symbolically

Ox=f(i1,i2,i3...........in)

where O_x =output of a commodity x

f= functional relationship

i1,i2,i3,......in=inputs needed for Ox
Question 4
1 / -0

TFC is not zero at zero level of output as

A
There is an employment of fixed factors at zero level of output

B
There cannot be any employment of fixed factors at zero level of output

C
There are no fixed factors at zero level of output

D
It can never be negative

Solution

TFC is fixed for all levels of output. It does not vary with the level of output. For eg: rent of premises, payment of salary, interst on loan etc.
Question 5
1 / -0

Market supply is best defined as

A
Horizontal summation of all individual quantity supplied at a given price

B
Vertical summation of all individual quantity supplied at a given price

C
Horizontal summation of all individual quantity supplied at various prices

D
Vertical summation of all individual quantity supplied at various prices

Solution

It is the tabular statement showing various quantities of a commodity that all the producers are willing to sell at various levels of price during a given period of time.
Question 6
1 / -0

The break- even point is

A
MR

B
TR=TC

C
MR>MC

D
MR=MC=0

Solution

At break even point, the firm is able to meet all its cost. Break even point is the situation of normal profits ( No profit No loss). Any point below the point where TR=TC is indicated by abnormal loses and any point above TR=TC indicates abnormal profits
Question 7
1 / -0

opportunity cost is the

A
Next best alternative produced

B
Next best alternative chosen

C
Next best alternative available

D
Next best alternative sacrificed

Solution

For eg. if you are working in a restaurant at a salary of Rs. 50,000. and you receive an offer to work for a news channel which will pay you Rs. 30,000 and another offer to work in a administrative office which will offer you 40,000 Rs.

In this case the opportunity cost of working in the restaurant is the cost of the next best alternative foregone, which is the offer of Rs. 40,000 for working in a office.
Question 8
1 / -0

The law of supply explains a

A
Positive relationship between Price of a commodity and market supply

B
Negative relationship between Price of a commodity and quantity supplied

C
Positive relationship between Price of a commodity and quantity supplied

D
Positive relationship between Price of a commodity and supply

Solution

According to the law of supply there is a direct relationship between the price of the commodity and the qty supplied. If the price increases qty supplied increases and vice versa.
Question 9
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 .
Question 10
1 / -0

The relationships between TR and MR when price fall is

A
TR falls but MR rises

B
TR rises but MR falls

C
TR rises and then fall but MR falls with sales

D
Both rise in sales

Solution

When more output is sold by lowering the price, then MR will fall. Till the point MR is positive, TR will rise and when MR becomes negative, TR starts falling. TR is at its maximum when MR is zero.

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Re-Attempt Weekly Quiz Competition

Producer Behaviour and Supply Test - 2

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Producer Behaviour and Supply Test - 2

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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

Additional cost involved in production

Same as total revenue

Solution

Question 2

Variable factors

Fixed factors

All the factors

None

Solution

Question 3

Technological relationship between inputs and output

Technological relationship between inputs and cost

Economic relationship between inputs and output

Technological relationship between inputs and price

Solution

Question 4

There is an employment of fixed factors at zero level of output

There cannot be any employment of fixed factors at zero level of output

There are no fixed factors at zero level of output

It can never be negative

Solution

Question 5

Horizontal summation of all individual quantity supplied at a given price

Vertical summation of all individual quantity supplied at a given price

Horizontal summation of all individual quantity supplied at various prices

Vertical summation of all individual quantity supplied at various prices

Solution

Question 6

MR

TR=TC

MR>MC

MR=MC=0

Solution

Question 7

Next best alternative produced

Next best alternative chosen

Next best alternative available

Next best alternative sacrificed

Solution

Question 8

Positive relationship between Price of a commodity and market supply

Negative relationship between Price of a commodity and quantity supplied

Positive relationship between Price of a commodity and quantity supplied

Positive relationship between Price of a commodity and supply

Solution

Question 9

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

Question 10

TR falls but MR rises

TR rises but MR falls

TR rises and then fall but MR falls with sales

Both rise in sales

Solution

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