CA FOUNDATION PAPER - 4 (BUSINESS ECONOMICS) 500+ MCQs
CHAPTER - 3 THEORY OF PRODUCTION MOST IMPORTANT OBJECTIVE QUESTIONS
Hello Students ! Hope you all are doing well. We are Glad to Inform you that we are providing A whole new sets of objective based questions for your CA FOUNDATION BUSINESS ECONOMICS (PAPER - 4) EXAMINATION in which you are getting most important Chapterwise MCQs for all the Chapters of BCK AND BUSINESS ECONOMICS
- These MCQs are specially designed to give a quick and comprehensive view just before your examination
- There are More than 100+ MCQs of this particular chapter that cover 100% part of your chapter
1. What is Production is Economics:
-
(a) Creating/Addition of Utility
(b) Production of food grains
(c) Creation of services
(d) Manufacturing of goods
2. Which of the following is considered as production in economics?
-
(a) Helping a blind person in crossing the road
(b) Group dance performance in a college annual function
(c) Holding a child who is falling from a wall
(d) Performing an art in a theatre
3. Which of the following is considered production in Economics?
-
(a) Tilling of soil.
(b) Singing a song before friends
(c) Preventing a child from falling into a manhole on the road.
(d) Painting a picture for pleasure.
4. Which of the following statements is true
-
(a) The services of a doctor are con- sidered production.
(b) Man can create matter.
(c) The services of a housewife are considered production
(d) When a man creates a table, he creates matter.
5. In Economics, entire process of____________is nothing but creation of utilities in the form of goods and services.
-
(a) Consumption
(b) Production
(c) Exchange
(d) Distribution
6. Production is defined as:
-
(a) Creation of matter
(b) Creation of utility in matter
(c) Creation of infrastructural facilities
(d) None of the above
7. According to__________Production is the organised activity of transforming resources into finished products in the form of goods and services, and the objective of production is to satisfy the demand of such transformed "resources".
-
(a) James Bates
(b) J.R. Parkinson
(c) Marshall
(d) Both (a) and (b)
8.___________to exchange in the market is an essential component of production.
-
(a) Intention
(b) Ability
(c) Capacity
(d) Possibility
9. Production does not include work done__________
-
(a) Within a household out of love & affection
(b) Voluntary services
(c) For self consumption
(d) All of the above.
2. Factors of Production
10. Factors of production refer to:
-
(a) Inputs se
(b) Outputs al noubor
(c) Both (a) & (b)
(d) Either (a) or (b)
11.___________ are the factors or resources which make it possible to produce goods and services.
-
(a) Land, Labour, and Bank
(b) Capital, Owner and manpower
(c) Land, Labour and Entrepreneurial ability
(d) Land, Labour, Capital and Entrepreneurial ability
12. No two pieces of land and alike. They differ in fertility and situation Therefore, Land is__________
-
(a) Homogenous
(b) Heterogeneous
(c) Bitrogeneous
(d) None of these.
13. Which of the following is correct about Land?
-
(a) It is mobile
(b) It has single use
(c) Its supply is fixed
(d) It is homogeneous
14. The total supply of Land is _________ from the point of view of the economy. However, it is relatively _________ from the point of view of a firm.
-
(a) Perfectly Inelastic, Inelastic
(b) Perfectly Inelastic, Relatively Elastic
(c) Perfectly Elastic, Inelastic
(d) Perfectly Elastic, elastic
15. Labour force wants more__________
-
(a) Facility
(b) Leisure
(c) Benefit
(d) All of the above
16. Which of the following is not a characteristic of labour?
-
(a) It is perishable
(b) It has weak bargaining power
(c) Labour and Labour power cannot
be separated (d) Labour is not mobile
17. Which one of the following may be regarded as a part of social capital?
-
(a) Roads
(b) Bridges
(c) Machinery
(d) Both (a) & (b)
18. The three stages of capital formation are:
-
(a) Savings, Mobilization of Savings and investment
(b) Mobilization of Saving, Savings, and investment
(c) Investment, Saving and mobilization of Saving
(d) Saving, Investment and mobilization of savings.
19._________ means a sustained increase in the stock of real capital in a Country.
-
(a) Capital formation soubory
(b) Savings
(c) Mobilisation of Savings
(d) Mobilization of Capital
20. Which one of the following statements is not correct?
-
(a) Land has indestructible powers
(b) Labour is mobile
(c) Capital is nature's gift
(d) Land is a passive factor
21. Functions of the entrepreneur are:
-
(a) Risk bearing
(b) Initiating a business enterprise and resource coordinating
(c) Introducing new innovations
(d) All of the above
22. An Entrepreneur undertakes which one of the following functions?
-
(a) Initiating a business and resource co-ordination
(b) Risk or uncertainty bearing
(c) Innovations
(d) All of the above
23. Innovation theory of entrepreneurship is propounded by:
-
(a) Knight
(b) Schumpeter
(c) Max Weber
(d) Peter Drucker
24. The most important function of an entrepreneur is to________
-
(a) Innovate
(b) Bear the sense of responsibility
(c) Finance
(d) Earn profit
25. Who has given the concept of Innovative Entrepreneurship?
-
(a) Robbins
(b) Adam Smith
(c) Schumpeter
(d) Sweezy
26. The basic minimum objective of all kinds of enterprises is to survive or to stay alive. It may be regarded as___________ objective of the enterprise.
-
(a) Organic
(b) Economic
(c) Social
(d) National
27.___________ objective implies maximizing behaviour of the profit the firm.
-
(a) Organic
(b) Economic
(c) Social
(d) National
28.___________ mobilizes factors of production, combines them in the right proportion, initiates the process of production and bears the risks involved in it.
-
(a) Businessman
(b) Manager
(c) CEO
(d) Entrepreneur
29. Which one of the following function is performed by entrepreneur?
-
(a) Initiating Business Enterprise and resource Co-ordination
(b) Risk-bearing or uncertainty bearing
(c) Innovations
(d) All of the above.
30. According to__________the true function of an entrepreneur is to introduce innovations.
-
(a) Schumpeter
(b) Peter Ducker
(c) Paul Samuelson
(d) None of the above.
Production Function
31. Which of the following is the be definition of "production function
-
(a) The relationship between market price and quantity supplied.
(b) The relationship between the firm's total revenue and the cost of production.
(c) The relationship between the quantities of inputs needed to produce a given level of output.
(d) The relationship between the quantity of inputs and the firm's marginal cost of production.
32. A production function is defined as the relationship between__________
-
(a) The quantity of physical inputs and physical output of a firm
(b) Stock of inputs and stock of out- put
(c) Prices of inputs and output
(d) Price and supply of a firm
33. The production function is a relationship between a given combination of inputs and:
-
(a) Another combination that yields the same output
(b) The highest resulting output.
(c) The increase in output generated by one-unit increase in one output
(d) All levels of output that can be generated by those inputs.
34. What is a production function?
-
(a) Technical relationship between physical inputs and physical output.
(b) Relationship between fixed fac- tors of production and variable factors of production
(c) Relationship between a factor of production and the utility created by it
(d) Relationship between quantity of output produced and time taken to produce the output.
35. Production function is:
-
(a) Purely a technical relationship
between input & output
(b) Purely an economic relationship between input & output
(c) Both the technical & economical relationship between input & output
(d) None of the above
36. The production function:
-
(a) Is the relationship between the quantity of inputs used and the To resulting quantity of product
(b) Tells us the maximum attainable not output from a given combination of inputs. sebegin to
(c) Expresses the technological relationship between inputs and output of a product.
(d) All the above.
37.__________ shows the overall output generated at a given level of input:
-
(a) Cost function
(b) Production function
(c) ISO cost
(d) Marginal rate of technical substitution
38. Which function shows relationship between input and output?
-
(a) Consumption function
(b) Investment function
(c) Production function
(d) Cost function
39. Long period production function is related to:
-
(a) Law of variable proportions
(b) Laws of returns to scale
(c) Law of diminishing returns
(d) None of the above
40. Long-run does not have:
-
(a) Average Cost
(b) Total Cost
(c) Fixed Cost
(d) Variable Cost
41. A fixed input is defined as
-
(a) That input whose quantity can be the quickly changed in the short run, in response to the desire of the company to change its production.
(b) That input whose quantity cannot be quickly changed in the short run, in response to the desire of the company to change its production.
(c) That input whose quantities can be easily changed in response to [ the desire to increase or reduce On the level of production.
(d) That input whose demand can be easily changed in response to the desire to increase or reduce the level of production.
4. Cobb-Douglas Production Function
42. Paul Douglas and Cobb studied the production function of the ___________manufacturing industries.
-
(a) American
(b) Japanese
(c) Britishct
(d) Asian
43. In its original form, the Cobb- Douglas production function applies:
-
(a) To individual firm
(b) To selected Firms
(c) To whole of manufacturing in USA
(d) None of the above.
44. In Cobb-Douglas production function, two inputs are:
-
(a) Land and Labour
(b) Labour and Capital
(c) Capital and Entrepreneur
(d) Entrepreneur and land
45. The famous Cobb-Douglas production function is based on studies of____________ industries in the United States of America.
-
(a) Manufacturing
(b) Construction
(c) Consumer
(d) Aviation
46. According to Cobb-Douglas production function, will get_____________returns to scale?
-
(a) Constant
(b) Diminishing
(c) Increasing
(d) Any of the above
Total, Average and Marginal Product
47._________ is the total output resulting from the efforts of all the factors of production combined together at any time.
-
(a) Total Product
(b) Average Product
(c) Marginal Product
(d) None of the above
48. Average product is defined as
-
(a) Total product divided by the total cost.
(b) Total product divided by marginal product.
(c) Total product divided by the number of units of variable input
. (d) Marginal product divided by the number of units of variable input.
49. Suppose the first four units of a variable input generate corresponding total outputs of 200, 350, 450, 500. The marginal product of the third unit of input is:
-
(a) 50
(b) 100
(c) 1500
(d) 200
50. Suppose the first four units of a variable input generate correspond- ing total output of 150, 200, 350, 550. What will be the marginal product of the third unit of input?
-
(a) 50
(b) 100
(c) 150
(d) 200
51. Marginal product, mathematically, is the slope of the
-
(a) Total product curve.
(b) Average product curve.
(c) Marginal product curve.
(d) Implicit product curve.
52. Marginal, average and total uct of a firm in the short run comprise with prod will ΠΟΥ
-
(a) When marginal production is a a maximum, average product is equal to marginal product, and total product is rising
(b) When average product is maximum, average product is equal to marginal product, and total is rising
(c) When marginal product is negative, total product and average product are falling
(d) When total product is increasing, average product and marginal product may be either rising or falling
53. When average product rises as a result of an increase in the quantity of variable factor, marginal product is:
-
(a) Equal to average product
(b) More than average product
(c) Less than average product
(d) Becomes negative
54. The marginal product curve is above the average product curve when the average product is:
-
(a) Increasing
(b) Decreasing
(c) Constant
(d) None
55. Identify the correct statement
-
(a) The average product is at its maximum when marginal product is equal to average product.
(b) The law of increasing returns to scale relates to the effect of changes in factor proportions.
(c) Economies of scale arise only because of indivisibilities of factor proportions.
(d) Internal economies of scale can accrue when industry expands beyond optimum.
56. If the marginal product of labour is below the average product of labour, it must be true that:
-
(a) The marginal product of labour is negative.
(b) The marginal product of labour is zero.
(c) The average product of labour is falling.
(d) The average product of labour is negative.
57. The average product of labour is maximized when marginal product of labour:
-
(a) Equals the average product of labour.
(b) Equals zero.
(c) Is maximized.
(d) None of the above.
58. The marginal, average, and total product curves encountered by the firm producing in the short run exhibit all of the following relationships except:
-
(a) When total product is rising, average and marginal product may be either rising or falling
(b) When marginal product is nega- tive, total product and average product are falling.
(c) When average product is at a maximum, marginal product equals average product, and total product is rising.
(d) When marginal product is at a maximum, average product equals marginal product, and total product is rising.
59. If the marginal product of labour is below the average product of labour. It must be true that:
-
(a) Marginal product of labour is Negative
(b) Marginal product of labour is zero
(c) Average product of labour is falling
(d) Average product of labour is
5. Law of Diminishing Returns
60. In the production of wheat, all of the following are variable factors that are used by the farmer except:
-
(a) The seed and fertiliser used when the crop is planted
(b) The field that has been cleared of trees and in which the crop is planted.
(c) The tractor used by the farmer in bis planting and cultivating not only wheat but also corn and barley.
(d) The number of hours that the farmer spends in cultivating the wheat fields
61. Law of variable proportion is valid when:
-
(a) Only one input is fixed and all other inputs are kept variable
(b) All factors are kept constant
(c) All inputs are varied in the same proportion
(d) None of these
62. Production activity in the short period is analysed with the help of:
-
(a) Law of variable proportion.
(b) Laws of returns to scale
(c) Both (a) & (b)
(d) None of the above
63. The Law of Variable Proportions is associated with:
-
(a) Short period
(b) Long period
(c) Both short and long periods
(d) Neither short nor long period
64. The law of variable proportions is drawn under all of the assumptions mentioned below except the assumption that:
-
(a) The technology is changing.
(b) There must be some inputs whose quantity is kept fixed.
(c) We consider only physical inputs and not economically profitability in monetary terms.
(d) The technology is given and stable.
65. Law of increasing returns is applicable because of ___________
-
(a) Indivisibility of factors.
(b) Specialisation.
(c) Economies of scale.
(d) Both (a) & (b) above
66. In the first stage of law of variable proportions, total product increases at the
-
(a) Decreasing rate
(b) Increasing rate
(c) Constant rate
(d) Both (a) and (b)
67. During 2nd stage of law of Diminishing returns:
-
(a) MP and TP is maximum
(b) MP and AP are decreasing
(c) AP is negative
(d) TP is negative
'
68. A rational producer will produce in the stage in which marginal product is positive and :
-
(a) MP> AP
(b) MP = AP
(c) MPAP
(d) MP is zero
69. Diminishing marginal returns implies:
-
(a) Decreasing average variable costs
(b) Decreasing marginal costs
(c) Increasing marginal costs
(d) Decreasing average fixed costs
70. The phenomenon of diminishing returns rests upon the
______________ of the fixed factor:
-
(a) Divisibility
(b) Flexibility
(c) Indivisibility
(d) None of these
6. Returns to Scale
71. The concept of Returns to Scale is related with:
-
(a) Very short period
(b) Short period
(c) Long period
(d) None of above
72. Increasing returns to scale can be explained in terms of:
-
(a) External and internal economies
(b) External and internal diseconomies
(c) External economics and internal diseconomies
(d) All of these
73. Increasing returns to scale occurs due to:
-
(a) Economies of scale
(b) Specialization
(c) Indivisibility of factors
(d) All of these
74. Which of the following statements describes increasing returns to scale?
-
(a) Doubling of all inputs used leads to doubling of the output.
(b) Increasing the inputs by 50% leads to a 25% increase in output.
(c) Increasing inputs by 1/4 leads to an increase in output of 1/3.
(d) None of the above.
75. Returns to scale will said to be in operation when quantity of:
-
(a) All inputs are changed.
(b) All inputs are changed in already established proportion
(c) All inputs are not changed
(d) One input is changed while quantity of all other inputs remain the same
76. Which of the following is the reason of the working of law of increasing returns?
-
(a) Fuller utilisation of fixed factors
(b) Indivisibility of the factors (c) Greater specialization of labour
(d) All of the above
Hope You Like Our Content ! Please give us a share and drop down your valuable comment
ca foundation,
ca foundation mcqs,
ca foundation Business Economics,
ca foundation Business Economics mcqs,
ca foundation Business Economics objective questions,
ca foundation Business Economics chapter 3
ca foundation Business Economics chapter 3 Theory of Production
ca foundation Business Economics chapter 3 mcqs
ca foundation Business Economics chapter 3 Theory of Production mcqs
ca foundation Business Economics chapter 3 objective questions
ca foundation Business Economics chapter 3 Theory of Production objective questions
ca foundation Theory of Production mcqs
ca foundation Theory of Production objective questions