Producer Behaviour and Supply Test

Result

Producer Behaviour and Supply Test - 3

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Weekly Quiz Competition

Question 1
1 / -0

The general shape of TPP in the short run is

A
Hyperbola

B
U shaped

C
V- shaped

D
Inverse U shaped

Solution

It is inverse U shaped because the initially the total product increases at a increasing rate, and then it increases at a diminishing rate and finally the total product starts decreasing.
Question 2
1 / -0

The general shape of APP in the short run is

A
V- shaped

B
Hyperbola

C
Inverse U shaped

D
U shaped

Solution

It is because Average product increases at an increasing rate, then it starts decreasing in the second stage and continues to decrease in the third stage but AP will always be positive.
Question 3
1 / -0

TVC curve starts from origin as

A
TVC is zero at zero level of output

B
TVC is horizontal

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 4
1 / -0

In the long run TPP changes with the change in which of the following factors

A
Economic cost

B
Variable factors

C
Fixed factors

D
All the factors

Solution

In the long run all the factors can be changed. All the factors (variable and fixed) become variable factors in the long run.
Question 5
1 / -0

Explicit costs are paid to

A
External owners of factors

B
Internal owners of factors

C
The government

D
The tax authorities

Solution

payments made to hired labour, rented land or building, interest paid on loan taken from third party are all explicit factor payment as cash is actually going out from the business.
Question 6
1 / -0

Implicit costs are

A
Opportunity costs

B
Imputed costs

C
Same as explicit costs

D
Total cost

Solution

It is the cost of self supplied factors.
Question 7
1 / -0

The situation of ‘abnormal profits’ arise for a firm when

A
MR = MC = 0

B
TC is less than TR

C
MR is greater than MC

D
MR = MC

Solution

Break even point refers to the point where the total revenue is equal to the total cost. Any point below the break even level when TC is less than TR will result in abnormal profits for the firm.
Question 8
1 / -0

Cost function shows

A
Technological relationship between cost and price

B
Economic relationship between inputs and cost

C
Functional relationship between cost and output

D
Inverse relationship between inputs and cost

Solution

The relationship between cost and output is known as cost function. It is expressed as C = f(q)

where C= Cost of production

q= Quantity of output

f = functional relationship
Question 9
1 / -0

What is the difference between fixed cost and variable cost of production?

A
Both change with output

B
Both do not change with output

C
Fixed cost does not change with output but variable cost does

D
Fixed cost changes with output but variable cost does not

Solution

Fixed cost remains constant irrespective of the level of output. Fixed cost will remain the same even when the output is zero. But variable costs varies with the output. More output means more variable cost and vice versa. There will be variable cost when output is zero.
Question 10
1 / -0

Average Revenue(AR) is

A
Total revenue per unit of inputs used

B
Sum of Total Revenue and price

C
Total Revenue per unit of output

D
Total cost per unit produced

Solution

Average revenue is the total revenue divided by the number of units sold.

AR = TR/Number of units sold

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Re-Attempt Weekly Quiz Competition

Producer Behaviour and Supply Test - 3

Result

Producer Behaviour and Supply Test - 3

Score

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Rank

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SHARING IS CARING

Question 1

Hyperbola

U shaped

V- shaped

Inverse U shaped

Solution

Question 2

V- shaped

Hyperbola

Inverse U shaped

U shaped

Solution

Question 3

TVC is zero at zero level of output

TVC is horizontal

TVC is vertical curve from origin

TVC slopes upward from the origin at higher level of output

Solution

Question 4

Economic cost

Variable factors

Fixed factors

All the factors

Solution

Question 5

External owners of factors

Internal owners of factors

The government

The tax authorities

Solution

Question 6

Opportunity costs

Imputed costs

Same as explicit costs

Total cost

Solution

Question 7

MR = MC = 0

TC is less than TR

MR is greater than MC

MR = MC

Solution

Question 8

Technological relationship between cost and price

Economic relationship between inputs and cost

Functional relationship between cost and output

Inverse relationship between inputs and cost

Solution

Question 9

Both change with output

Both do not change with output

Fixed cost does not change with output but variable cost does

Fixed cost changes with output but variable cost does not

Solution

Question 10

Total revenue per unit of inputs used

Sum of Total Revenue and price

Total Revenue per unit of output

Total cost per unit produced

Solution

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