BCOM-Business Economics MCQ

Question 301 : At zero level of output, total cost of a firm is :

1. equal to zero
2. equal to variable costs
3. equal to marginal cost
4. equal to variable costs

Question 302 : When average cost is maximum :

1. Marginal cost is minimum
2. Marginal cost is equal to average cost
3. Marginal cost is also maximum
4. Total cost is minimum

Question 303 : The shortrun AVC curve moves upward owing to :

1. Increasing returns to scale
2. Rising overhead costs
3. Diseconomies
4. Diminishing returns

Question 304 : Increasing longrun average cost is attributed to :

1. the firms experience of increasing returns
2. the firms experience of economies of scale
3. decreasing returns to the scale
4. increasing average variable cost curve

Question 305 : When LAC curve intersect the LMC curve it implies :

1. the point of increasing returns
2. the optimum plant size
3. the end of economies of scale
4. none of the above

Question 306 : Division of labour results into :

1. Rising costs
2. Diminishing returns
3. Labour economy
4. Economies of scale

Question 307 : In longrun :

1. all costs are variable
2. costs are divided into fixed and variable costs
3. costs tends to constant
4. shape of LAC is always L

Question 308 : ______ is the cost that has already been incurred and which cannot be recovered

1. Fixed cost
2. Sunk cost
3. Private cost
4. Social cost

Question 309 : Fixed cost is regarded as ______ cost

1. unavoidable
2. variable
3. avoidable
4. none of the above

Question 310 : Electricity charges, sales tax etc. are examples of ______ cost.

1. Fixed
2. Variable
3. Private
4. Social

Question 311 : ______ is not related to the level of output

1. Total cost
2. Total variable cost
3. Total fixed cost
4. average cost

Question 312 : ______ is obtained by dividing TC by the level of output produced

1. Average fixed cost
2. Average variable
3. Total fixed cost
4. Average total cost

Question 313 : A firms ______ is the sum of total fixed costs and total variable cost at each level of output

1. Average fixed cost
2. Average variable cost
3. Total cost
4. None of these

Question 314 : The LAC curve is also referred as ______

1. envelope curve
2. planning curve
3. both (a) and (b)
4. None of the above

Question 315 : The rent of a factory is an example of ______

1. variable cost
2. fixed cost
3. both a and b
4. Neither a nor b

Question 316 : Which of the following curves is used for planning ______

1. SAC
2. SMC
3. LAC
4. LMC

Question 317 : Under constant costs conditions or constant returns to scale :

1. Economies of scale are continuously interacting
2. LAC and LMC curves coincide
3. LMC > LAC
4. The management is steady

Question 318 : The reduction in cost due to increase in efficiency is referred as ______.

1. income effect
2. price effect
3. Learning curve effect
4. all of the above

Question 319 : The downward slope of LAC curve is subject to the ______.

1. internal economies
2. economies and diseconomies
3. internal diseconomies
4. external diseconomies

Question 320 : ______ causes LAC curve to rise

1. Internal economies
2. Economies and diseconomies
3. External diseconomies
4. External economies

Question 321 : The Learning curve slopes downward showing a ______ in the cost per unit of output.

1. increase
2. decline
3. both (a) and (b)
4. None of these

Question 322 : Break-even analysis compares total ______ and total cost, graphically and algebraically.

1. Revenue
2. average variable cost
3. Average cost
4. None of the above

Question 323 : Break-even analysis at break-even point indicates ______ profit

1. Zero
2. Heavy loss
3. Large profit
4. All of the above

Question 324 : A break-even analysis is essentially a typical case of required profit analysis where the required profit is ______.

1. Zero
2. Large profit
3. Heavy loss
4. All of the above

Question 325 : The break-even quantity point will decrease, when price ______.

1. decreases
2. Increases
3. constant
4. None of the above

Question 326 : ______ is the point where total revenue is equal to total cost.

1. point of origin
2. Break-even point
3. Marginal point
4. None of the above

Question 327 : The ______ graphically depicts the profit-output relationship

1. Marginal point
2. Break-even chart
3. point of origin
4. All of the above

Question 328 : When TR > TC, it indicates ______ zone of a firm

1. Loss
2. Profit
3. All of the above

Question 329 : Break-even point of a chart indicates ______.

1. Large profit
2. Heavy loss
3. Zero profit
4. All of the above

Question 330 : Break-even analysis compare total revenue with ______.

1. Total cost
2. Average cost
3. marginal cost
4. None of the above

Question 331 : Break-even analysis is also referred to as ______.

1. Cost-volume-profit analysis
2. None of the above

Question 332 : ______ refers to the extent to which the firm can permit a decline in sales before it starts incurring losses.

1. safety margin
2. None of the above

Question 333 : BEA help the firm to determine ______ for a given level of output.

1. Maximum cost
2. Average cost
3. None of the above
4. minimum cost

Question 334 : BEA at break-even point indicate ______ profit.

1. Heavy loss
2. Large profit
3. None of the above
4. zero

Question 335 : The Break-even analysis is meant to put a break on the production.

1. true
2. false

Question 336 : The BEA provides an understanding of the functional relationship among cost, revenue and output rate.

1. true
2. false

Question 337 : The BEA provides an important link between business behavior in practice and economic theory.

1. true
2. false

Question 338 : The BEA relate to the long-term relationship.

1. true
2. false

Question 339 : The BEA is useful to the Prime Minister of collusion government.

1. true
2. false

Question 340 : At break-even point, the company makes loss.

1. true
2. false

Question 341 : The break-even-chart graphically shows cost and revenue relation.

1. true
2. false

Question 342 : In Linear Break-even analysis, total fixed cost is a vertical straight line parallel to

1. true
2. false

Question 343 : Y-axis.

1. true
2. false

Question 344 : When TC > TR it indicate profit zone.

1. true
2. false

Question 345 : BEA helps in determining the optimum level of output.

1. true
2. false

Question 346 : Total cost curve starts from above the origin.

1. true
2. false

Question 347 : The total revenue curve starts from the origin.

1. true
2. false

Question 348 : At break-even point TR > TC.

1. true
2. false

Question 349 : Break-even analysis has great importance to managerial economists.

1. true
2. false

Question 350 : The profit zone in a break-even chart shows TR = TC.

1. true
2. false