SHREEYADEVI BHAGIRATH RATHI

MAHESHWARI VIDYAPEETH
(An Institution of Shree MaheshwariShikshanSansthan)
WORKSHEET
Class: XI Subject: Microeconomics Chapter: 5,6

Section A

1 Variable proportions type production function exists: [1]

1. when with a change in the level of output there is a change in factor ratio

2. when scaling of production changes with change in the level of output

3. when scaling of production changes with change in the level of input

a) Only A

b) B and C

c) Only B

d) Only C

2 The cost incurred in per unit production is: [1]

a) variable cost

b) marginal cost

c) Fixed cost

d) average cost

3 production function shows technical relationship between physical inputs and [1]
output of a commodity

a) Technological relationship between inputs and price

b) Economic relationship between inputs and output

c) Technological relationship between inputs and output

d) Technological relationship between inputs and cost

4 Which of the following is not a reason for the operation of increasing returns to a [1]
factor?

a) Indivisibility of fixed factor

 b) Increase in efficiency of variable factor

c) Limitation of fixed factor

d) Better utilisation of fived factor

5 Economists typically assume that the owners of firms wish to: [1]
a) maximize sales revenues

b) All of these

c) produce efficiently

d) maximize profits
1 1
6 Let the production function of a firm be𝑄 = 5 𝐿2 𝐾 2 [1]

Find out the maximum possible output that the firm can produce with 100units
of L and 100 units of K.

7 Define Marginal Product. [1]

8 Define production function. [1]
9 Give the meaning of returns to a factor. [1]
10 Give one example of externality which reduces welfare of the people. [1]
11 Assertion (A): Average product increases only when marginal product increases. [1]
Reason (R): AP increases so long as MP is greater than AP whether MPis rising
or falling.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

12 Assertion (A): Increasing returns to a factor is a short - run phenomenon. [1]

Reason (R): Greater application of the variable factor ensures fully utilization of
the fixed factor.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

 d) A is false but R is true.

13 Which of the following equations is correct? [1]

𝑄
a) 𝑀𝑃 = 𝛥𝐿
𝛥Q
b) MP = L

𝑄
c) 𝐴𝑃 = 𝛥𝐿
Q
d) AP = L

14 Which one of the following equations is correct? [1]

a) AP = TP× L
𝛥TP
b) MP = 𝛥L

c) MP = TP𝑛 - TP 𝑛−2
AP
d) TP = L

15 Which of the following statement is true? [1]

1. Marginal Product refers to total output produced by a firm during a given
period of time with a given number of inputs.

2. Average Product refers to total output produced by a firm during a given

period of time with a given number of inputs.

3. Total Product refers to total output produced by a firm during a given

period of time with a given number of inputs.

4. Total Product refers to total input produced by a firm during a given

period of time with a given number of outputs.

a) only ii

b) only i

c) only iv

d) only iii

16 Choose the correct match: [1]

a) Diminishing return to a factor⇒ TP decreases
 b) Diminishing return to a factor⇒ TP Increases

c) Increasing return to a factor⇒ TP increases at increasing rate

d) Negative Return to a factor⇒ TP increases at diminishing rate

17 AFC curve never touches ‘x’ axis though it lies very close to x axis because [1]
a) AFC is always vertical

b) AFC can never be zero as TFC can never be zero

c) AFC is horizontal

d) AFC curve can never be extended to touch zero with increase in output

18 The relationship between AC & MC is [1]

a) AC continues to fall till MC is greater than AC

b) AC continues to fall till MC is less than AC

c) AC continues to rise till MC is less than AC

d) AC continues to fall till MC is equal to AC

19 With the increase in production the difference between total cost and total fixed [1]
cost:

a) Decreases

b) Both Increases or Decreases

c) Increases

d) Remains Constant

20 Marginal cost of a good includes: [1]

a) Total cost

b) variable cost and fixed cost

c) only fixed cost

d) only variable cost

21 When AC equals MC which of them is at its minimum [1]

a) AC

b) Both
 c) None

d) MC

22 What is implicit cost? Give one example. [1]

23 State whether the following statements are true or false. Give reasons for your [1]
answer. Average Cost will rise only when Marginal Cost rises.
24 Give the meaning of marginal cost. [1]
25 What is meant by cost of production? [1]
26 Does fixed cost influence the marginal cost? [1]
27 Assertion (A): Average Cost will rise only when Marginal Cost rises. [1]
Reason (R): Rise in AC takes place when MC is greater than ACand not
necessarily when MC rises.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

28 Assertion (A): When Average Cost is constant, AC curve is at its minimum point. [1]
Reason (R): At this point, MC curve cuts AC curve which implies MC = AC.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

29 Which statement of the following is true? [1]

a) AC = TFC – TVC

b) AC = AFC + AVC

c) AC = AFC + TVC

d) AC = TFC + AVC

30 Which of the following statement is true? [1]

1. Fixed cost curve is parallel to X - axis because it changes at all levels of
output.
 2. Fixed cost curve is parallel to Y - axis because it remains constant at all
levels of output.

3. Fixed cost curve is parallel to X - axis because it remains constant at all

levels of output.

4. Fixed cost curve is parallel to Y - axis because it changes at all levels of

output.

a) only ii

b) only iii

c) only iv

d) only i

31 Which of the following is correct: [1]

a) TC = TFC + TVC

b) TFC = AFC ÷ Q

c) MC = TC𝑛+1 - TVC 𝑛

d) MC = TC - TVC

32 Choose the correct match: [1]

a) MC ⇒ AC × Q

b) AFC ⇒ TFC × Q
TVC
c) AVC ⇒ Q

𝛥TVC
d) TC ⇒ 𝛥Q

33 State the phases in the behaviour of Total Product as per the Law of Variable [3]
Proportions. Use the diagram.
34 Let the production function of a firm beQ = 2 L2 K 2 [3]
Find out the maximum possible output that the firm can produce with 5 units of L
and 2 units of K. What is the maximum possible output that the firm can produce
with zero unit of L and 10 units of K?

35 State the relation between AP and MP. [3]

36 Giving reasons, explain the Law of Variable Proportions. [3]
37 Explain the likely behaviour of total product under the phase of increasing return [3]
to a factor with the help of numerical example.
38 Define fixed cost (FC). [3]
39 What are the average fixed cost, average variable cost and average cost of a firm? [3]
How are they related?
40 As output increases, AC tends to be closer to AVC. Why? [3]
41 Why is AC curve ‘U’ shaped? [3]
42 What is the behaviour of Total Fixed Cost, Total Variable Cost, Marginal Cost and [3]
Average Variable Cost as output is increased?
43 State True or False: [3]
1. A rational consumer prefers to operate in stage two of returns to factor.

2. AP will increase only when MP increases.

3. Initially, total product increases but ultimately falls when there are
diminishing returns to a factor.

44 Define Law of Constant returns to a factor. Explain. [4]

45 Discuss the causes of the operation of diminishing return to a factor. [4]
46 The following table gives the average product schedule of labour. Find the total [4]
product and marginal product schedules. It is given that the total product is zero
at zero level of labour employment.

47 The following table gives the marginal product schedule of labour. It is also given [4]
that total product of labour is zero at zero level of employment. Calculate the
total and average product schedules of labour.

48 Define law of diminishing returns (DR) to a factor. Explain it with the help of a [4]
schedule.
49 What is the behavior of (a) average Fixed Cost and (b) Average Variable Cost as [4]
more and more units of a good are produced?
50 [4]

Complete the following table

51 The following table gives the total cost schedule of a firm. It is also given that the [4]
average fixed cost at 4 units of output is₹ 5. Find the TVC, TFC, AVC, AFC, SAC and
 SMC schedules of the firm for the corresponding values of output.

52 Draw a diagram showing TVC in terms of the area under MC curve. [4]
53 Given below is a cost and revenue schedule of a producer. At what level of output [4]
is the producer in equilibrium. Give reason for your answer.

54 Calculate the MP of variable factor and indicate the various phases of Law of [6]
Variable Proportions from the following schedule:

55 Find out the missing values from the following table: [6]

56 State the behavior of marginal product in the law of variable proportions. Explain [6]
the causes of this behavior.
57 Explain the meaning of increasing returns to a scale and decreasing returns to a [6]
scale with the help of total physicalproduct schedule.
58 [6]

Complete the following table:

59 The total fixed cost of a firm is₹ 12. Given below is its marginal cost schedule. [6]
Calculate total cost and average variable cost for each given level of output.
60 Diagrammatically explain the relationship between (i) AVC and MC, & (ii) [6]
between TC and MC.
61 Calculate TC and AVC of a firm at each given level of output from its cost [6]

schedule.
62 Fill in the blanks: [7]
1. Economists find it convenient to distinguish between the ________ and the
long run.

2. ________ is first rising at an increasing rate, then rises at a decreasing rate

and falls after reaching its maximum.

3. Land is a free gift of ________. (nation/nature)

4. Total output is maximum when marginal product is ________. (zero,

negative)

5. The costs which vary as the level of output varies are called ________.
(prime costs, real costs)

6. Expenditure on raw material leads to ___________. (fixed cost, variable cost)

7. TC increases at an increasing rate when MC is ________.

(increasing/decreasing)