The Laws of Return operates in the:

• A.Long run
• B.Short run
• C.Medium term
• D.The very long run

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Question 16 of 30When marginal product is above average product, average product is:

• A.Falling
• B.Constant
• C.At a minimum
• D.Rising

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Question 17 of 30Which of the following best describes the productivity of a worker:

• A.Marginal product
• B.Marginal cost
• C.Average product
• D.Average cost

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Question 18 of 30Returns change because of:

• A.The variable factor
• B.The division of labour and specialization
• C.The fixed factor
• D.The marginal product

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Question 19 of 30Economies of Scale is achieved when:

• A.In the short run, output increases more than proportionately with factor inputs
• B.In the long run, output increases more than proportionately with factor inputs
• C.There are many sources of inputs
• D.When firms cannot change the inputs of factors

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Question 20 of 30Which of the following is true?

• A.Variable costs are zero when output is zero
• B.Fixed costs are zero when output is zero
• C.Variable costs are also indirect costs
• D.Fixed costs are direct costs

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Question 21 of 30Which of the following curves is not U-shaped

• A.Marginal cost
• B.Average cost
• C.Average total cost
• D.Average Fixed cost

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Question 22 of 30The relationship between Marginal Cost and Average Cost is:

• A.If marginal cost is below average cost, then average cost is rising
• B.If marginal cost is above average cost then average cost is falling
• C.Marginal cost meets average cost at its highest point
• D.If marginal cost is below average cost then average cost is falling

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Question 23 of 30In Economics cost of production include the costs of:

• A.Rent and interest
• B.Wages and profit
• C.Wages, profit and interest
• D.Rent, wages, interest and profit

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Question 24 of 30All firms will seek to maximize profit by producing that level of output where:

• A.Marginal = price
• B.Marginal cost= marginal revenue
• C.Marginal cost is less than marginal revenue
• D.Marginal cost is average cost

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Question 25 of 30In a perfect market:

• A.The firm is a price maker
• B.The firm can influence other firms
• C.The firm is a price taker
• D.The firm can charge any price for its commodity

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Question 26 of 30In a perfect market the firm can continue in production if:

• A.It is making normal profit
• B.It is price is lower than its cost
• C.Its revenue is less than its cost of production
• D.Marginal cost is greater than marginal revenue

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Question 27 of 30In which market is price=average revenue= marginal revenue

• A.Monopoly
• B.Duopoly
• C.Oligopoly
• D.Perfect market

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Question 28 of 30Which of the following is true?

• A.In monopoly profits are eaten away in the long run
• B.In monopoly price is equal to average revenue
• C.In the long run Profits are eaten away in perfect competition
• D.There is perfect knowledge in a monopoly

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Question 29 of 30Oligopoly means

• A.Competition among many
• B.Competition among the few
• C.No competition
• D.One major producer

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Question 30 of 30Under monopoly marginal revenue is always

• A.Greater than average revenue
• B.Equal to average revenue
• C.Equal to total revenue
• D.Less than average revenue