# CBSE Class 12 Ecomonics - Graded Excercise Questions

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CBSE Class 12 Ecomonics - Graded Excercise Questions CBSE,CCE and NCERT students can refer to the attached file. All educational material on the website has been prepared by the best teachers having more than 20 years of teaching experience in various schools. The study material available on our website for all CBSE classes and subjects have been prepared by teachers from all over the country. All study material has been carefully designed keeping into mind the latest CBSE examination trends.

PRODUCER BEHAVIOUR AND SUPPLY

PRODUCTION

MULTIPLE CHOICE QUESTIONS

1) Which of the following statements accurately describe the relationship between AP and MP?

a) AP rises when MP is above it and falls when MP is below it.

b) MP intersects AP at its minimum point.

c) AP and MP are always parallel to each other.

d) AP is always rising when MP is falling and vice-versa.

2)When MP is zero, what can you say about TP?

a) TP is increasing

b) TP is maximum

c) TP is falling

d) None of the above

3) Marginal Product refers to addition to total output when one more:

a) Unit is produced

b) Unit is sold

c) Unit is consumed

d) Unit of variable factor is employed

a) Short run

b) Long run

c) Both (a) and (b)

d) Neither (a) nor (b)

a) Law of Variable Proportions

b) Law of Demand

c) Law of Equi-marginal utility

d) Law of Diminishing Marginal utility

a) Law of Returns

b) Returns to Variable Factor

c) Law of Returns to Factor

d) All of these

a) 0 units

b) 30 units

c) 200 units

d) 50 units

4) Identify the phase in which TP increases at an increasing rate and MP also increases.

a) Increasing returns to a factor

b) Diminishing returns to a factor

c) Negative returns to a factor

d) None of these

5)Which of the following is not a reason for operation of increasing returns to a factor?

a) Better utilization of fixed factor

b) Limitation of fixed factor

c) Increase in efficiency of variable factor

d) Indivisibility of fixed factor

6)When average product increases, the marginal product is:

a) Less than average product

b) Equal to the average product

c) More the average product

d) None of these

a) AP rises

b) AP falls

c) AP remains constant

d) None of these

7)What is the behavior of TP, when MP becomes negative?

a) TP increases at an increasing rate

b) TP increases at diminishing rate

c) TP is at its maximum point

d) TP decreases

8)Average product cannot be negative because:

a) Total product can never be zero

b) Total product can never be negative

c) Neither (a) nor (b)

d) Both (a) and (b)

9)The law of diminishing returns refers to an eventual fall in:

a) Productivity of factors of production

b) Total earnings of the firm

c) Marginal product of the variable factor

d) None of these

10)The 2nd phase (diminishing returns to a factor) is exhibited by the following total product sequence:

a) 50, 50, 50, 50

b) 50, 110, 180, 260

c) 50, 100, 150, 200

d) 50, 90, 120, 140

11)A rational producer always aims to operate in __________ of Law of Variable Proportions:

a) 1st phase (Increasing returns to a factor)

b) 2nd phase (Diminishing returns to a factor

c) 3rd phase (Negative returns to a factor)

d) Either 1st phase or 2nd phase

a) Technical relation between inputs and outputs

b) Economical relation between the factors of production

c) Productivity of factors of production

d) None of these

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