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Chapter 4: Costs and Revenue (Set-4)
Break-even point (BEP) refers to the output level where A Total cost is maximum B Total revenue is maximum C Total revenue equals total cost D Marginal revenue equals zero Explanation Break-even occurs when TR = TC, meaning the firm earns neither profit nor loss at that output. At break-even point, the firm earns A…
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Chapter 4: Costs and Revenue (Set-3)
Total revenue (TR) is calculated as A Price × Quantity sold B Total cost ÷ Output C Marginal cost × Output D Profit + Total cost Explanation Total revenue equals the total sales receipts of a firm, calculated by multiplying price per unit by quantity sold. Average revenue (AR) is A TR – TC B…
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Chapter 4: Costs and Revenue (Set-2)
Short-run is defined as a period in which A All factors are fixed B All factors are variable C Some factors are fixed D Output is constant Explanation In the short run, at least one factor of production remains fixed while others are variable. Long-run cost curves differ from short-run cost curves because in the…
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Chapter 4: Costs and Revenue (Set-1)
Cost in economics refers to A Only money spent on inputs B Opportunity cost of resources used C Accounting expenditure only D Market price of output Explanation Economic cost includes explicit costs plus implicit (opportunity) costs of owned resources used in production. Fixed cost is a cost that A Changes with output B Varies proportionately…
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Chapter 3: Producer Behaviour and Supply (Set-4)
Producer’s equilibrium is achieved when A Cost is minimum B Output is maximum C Profit is maximum D Revenue is maximum Explanation Producer’s equilibrium refers to the level of output at which profit difference between revenue and cost is the highest. Producer’s equilibrium under perfect competition can be analyzed using A Indifference curve B Demand…
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Chapter 3: Producer Behaviour and Supply (Set-3)
Returns to scale refer to the change in output when A One factor is increased B All factors are increased proportionately C Price of output changes D Cost of production changes Explanation Returns to scale examine output response when all inputs are increased in the same proportion. Increasing returns to scale are mainly due to…
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Chapter 3: Producer Behaviour and Supply (Set-2)
Elasticity of supply measures the responsiveness of A Demand to income B Supply to price change C Supply to income D Demand to price Explanation Elasticity of supply shows how much quantity supplied responds to a change in price of the commodity. If a small change in price leads to a large change in quantity…
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Chapter 3: Producer Behaviour and Supply (Set-1)
Supply in economics refers to A Stock of goods available B Quantity producers wish to sell at different prices C Quantity demanded at a price D Total production of a firm Explanation Supply means the quantity of a commodity that producers are willing and able to offer for sale at various prices during a given…
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Chapter 2: Consumer Behaviour and Demand (Set-4)
Consumer surplus refers to A Difference between total utility and total expenditure B Excess of price over willingness to pay C Total utility from consumption D Total satisfaction at equilibrium Explanation Consumer surplus is the excess of total utility obtained from a good over the total amount actually paid for it. The concept of consumer…
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Chapter 2: Consumer Behaviour and Demand (Set-3)
Elasticity of demand measures the A Change in demand B Change in quantity demanded C Responsiveness of demand to changes in determinants D Slope of demand curve Explanation Elasticity of demand measures how much quantity demanded responds to changes in price, income, or prices of related goods. Price elasticity of demand refers to responsiveness of…
