ECONOMICS CLASS TEST for 7th SEMESTER COMPUTER ENGINEERING

Course TitleManagerial Economics

InstructorProf. Leena Mary Eapen

Duration10 minutes

Maximum Marks10

Date & Time11/2/12 10.00-10.10pm

1. With a given plant size, an increase in the output cannot produce an increase in

a) Total cost

b) Average fixed cost

c) Average total cost

d) Average variable cost

2. When Marginal product is highest

a) Total product is maximum

b) Marginal cost is maximum

c) Marginal cost is zero

d) Marginal cost is minimum

3. When average product is highest

a) Marginal product is maximum

b) Marginal product is zero

c) Marginal product is equal to average product

d) Marginal product is below average product

4. If a change in all inputs leads to a proportional change in the output, it is a case of a) Economies of scaleb) Constant economies of scalec) Variable returns to scaled) Constant returns to scale5. The average cost will be minimum at a point wherea) Marginal cost and average cost curves intersectb) Marginal cost and average fixed cost curves intersect

c) Marginal cost is minimumd) Average variable cost is minimum

6. Average fixed cost a) Always declines as the output increasesb) Is U-shaped, if there are increasing returns to scale c) Is U-shaped, if there are decreasing returns to scaled) None of the above7. Knowledge of fixed costs and variable costs enable one to determine which of the following

a) Average costsb) Average total cost

c) Marginal cost

d) All of the above

8. A distinguishing characteristic of the long run period is that

a) All costs are fixed costsb) All costs are variable costsc) 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) `1b) `5c) `10

d) `1510. Cost function of a firm is estimated to be TC= 500 + Q3 - Q2 + 100Q. Fixed cost for the firm is

a) 500b) 50000c) 100d) None of the aboveIndian Institute of Management Kozhikode

Quiz 2

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