Top 20 Important Questions in Production Function

Production Function Important Questions-01

1. Land includes the following natural resources.

a. On the surface (i.e., soil, agricultural land)

b. Below the surface (i.e., mineral resources, rocks, groundwater, etc.)

c. Above the surface (i.e., climate, rain space monitoring, etc.)

d. All the above.

Ans: (d) All the above.

2. The peculiarity of labor is that it has got a backward sloping

a. Supply curve

b. Demand curve

c. Engel curve

d. Consumption curve

Ans: (a) Supply curve

3. The peculiarly of labor, Which separates it from another factor of production is that

a. Its supply is limited

b. labor is inseparable from the laborer

c. Its demand is fixed

d. All of these

Ans: (d) All of these

4. which of the following cannot be termed as ‘capital’?

a. Wheat stored for seed

b. Money hoarded in lockers

c. Money invested in unit trust

d. Truck used for carrying raw materials to the factory

Ans: (b) Money hoarded in lockers

5. The real aim of production is

a. To create material goods

b. To eliminate poverty.

c. To satisfy people’s wants

d. To provide necessities

Ans. (c) To satisfy people wants

6. In economics, the term ‘production’ implies

a. Manufacture of a product

b. Creation of utility

c. Growing a crop

d. Providing a service

Ans. (b) Creation of utility

7. Divisions of labor require the division of a production process into a series of distinct operations

a. Each of which is linked ‘each of which it is performed by different workers

b. Each of which is essentially similar, each of which requires little skill.

c. None of which is linked, but all of which required the use of machinery

d. None of which is linked, but all of which require skilled labor.

Ans: (a) Each of which is linked ‘each of which it is performed by different workers

8. Capital’ means to the economist that produced an instrument of production the use of which

a. produces further wealth

b. Result in profits

c. Creates employment

d. Requires skill

Ans: (a) produces further wealth

9. The basic principle underlying location is the tendency for the production of the commodity to be located based on

a. Division of labor

b. Employment trends

c. Relatives costs and benefits

d. Immobility of skilled labor

Ans: (c) Relatives costs and benefits

10. By “Labour the economist means

a. All the work which provides necessities

b. All the work performed by those not classified as “unemployable’

c. The human effect employed in the production

d. The human effect employed in the production of capital

Ans. (c) The human effect employed in the production

11. Which of the following would be classified by the economist as “capital”?

I. lathe in an engineering factory

II. A lorry used for carrying finished goods

III. A new timber plantation

IV. Colin the steam

a. I only

b. I, II

c. I, II, III

d. I, II, III, IV

Ans: (b) I, II

12. which of the following have an important influence on the elasticity of demand for factors?

I. The extent of localization of industries.

II. The number of Factors required  in a particular type of production

III. Substitutability between Factors

IV. Mobility of finance capital.

a. I only

b.  II, III

c. I, II, III

d. I, II,III, IV

Ans. (b)  II, III

13. Find out the best reason

The difference in wages is due to

a. Mobility of labor

b. The difference in demand condition

c. Customs and Traditions in fixing the level of remuneration

d. The marginal productivity of labor

Ans: (b) The difference in demand condition

14. A production function of the form Q(K, L)=AKα Lβ Where k is capital, L is labor, A constant,α,β are parameters

a. C.E.S production function

b. Translog production function

c. Input-output production Function

d. Cobb- Douglas production function

Ans: (d) Cobb- Douglas production function

15. Production function relates

a. Prides to demands

b. Demand to supply

c. Cost to supply

d. Input to Output

Ans: (d) Input to Output

16. The major difference between a short-run and long-run production analysis lies in the no. of

a. Variables input

b. products

c. consumers

d. Markets

Ans: (a) Variables input

17. A technical progress in the production function tends to

a. Shift the isoquant upwards

b. Shift the isoquant downwards

c. Keep the iso-quant as it is

d. Either (a) or (b)

Ans. (a) Shift the isoquant upwards

18. Fixes inputs are the factors of production that

a. Are determined by firms plants size

b. Can be increased or decreased quickly as output changes

c.Can not be increased or decreased as output changed

d. None of the above

Ans. (d) Can not be increased or decreased as output changed

19. The production function of a firm will change whenever

a. Input pride changes

b. The firm employs more or any input

c. the firm increased its level output.

D The relevant technology changes

Ans: (d) The relevant technology changes

20. On the expansion path, the firm operating with a homogeneous production function, which among the following remain constant?

1. Input ratio

2. Price ratio of inputs

3. Marginal rate of technical substitution between the factors

4. Elasticity of substitution

Select the correct answer using the codes given below :

a.1 and 2

b. 1 and 4

c. 2, 3, and 4

d. 1,2,3 and  4

Ans: (d) 1,2,3 and  4

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