Production and cost — Economics STD 12 Humanities & Commerce — Question

The rate of interest offered by the bank to deposit holders is called the:

1. Bank rate.
2. Borrowing rate.
3. Lending rate.
4. Inflation rate.

Which out of the following is a non-developmental expenditure?

1. Scientific research.
2. Social Welfare.
3. Administration.
4. None of these.

When MC is equal to MR, while maximizing profit, then

1. MC must be rising.
2. MC must be falling.
3. MC must be constant.
4. None of these.

Suppose that a sole proprietorship is earning total revenues of ₹ 1,00,000 and is incurring explicit costs of ₹ 75,000. If the owner could work for another company for ₹ 30,000 a year, we would conclude that ______________.

1. The firm is incurring an economic loss.
2. Implicit costs are ₹ 25,000.
3. The total economic costs are ₹ 1,00,000.
4. The individual is earning an economic profit of ₹ 25,000.

Autonomous consumption is indicated by _______ in the consumption function.

1. C
2. AC
3. S
4. C

____________ are not zero at zero level of output.

1. Fixed costs.
2. Variable costs.
3. Marginal costs.
4. Average variable costs.

Hint: Fixed cost cannot be avoided even if output is zero, e.g. rent of factory, salaries of permanent employees, municipal tax, etc.

If regardless of changes in its price, the quantity demanded of a good remains unchanged, then the demand curve for the good will be:

1. Horizontal.
2. Vertical.
3. Positively sloped.
4. Negatively sloped.

The usual shape of Production Possibility Curve is ______ towards the origin.

1. Convex.
2. Concave.
3. Straight line.
4. Rectangular.

Which of the following is not the function of the central bank?

1. Banking facilities to government.
2. Banking facilities to public.
3. Lendings to government.
4. Lendings to commercial bank.

The reason behind a rightward or outward shift of PPC could be:

1. Growth of resources.
2. Technological advancement.
3. Fall in resources or obsolete technology.
4. Either (a) or (b) or both.