Case-Based MCQs of Production Function Microeconomics class 11 CBSE

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Case Based Multiple Choice Questions of Production Function chapter with answers of Microeconomics class 11

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Question – 1 (Case – Study)

Farmers in our country are mostly small and marginal. They produce for self-consumption and hardly have any surplus crop to sell in the market.

These farmers produce with the help of their family members. Also due to limited landholding at times, there are more labours working compared with what is actually required, this leads to disguised unemployment.

The use of primitive tools and techniques further reduces the ability of these families to increase production.

1) In the case of disguised unemployment, the marginal product of labour is equal to

a) Zero
b) Positive
c) negative
d) Either a) or c)

Ans – a)

Explanation:- In the case of disguised unemployment, the marginal productivity of labour
becomes zero. Thus, he/she does not contribute anything to output.

2) In the case of land, the ‘law of returns to factor’ is applicable in _________ .

a) Short-run
b) medium run
c) long run
d) None of these

Ans – a)

3) In the above situation, productivity was low due to __________ .

a) fixity of land
b) use of primitive tools and techniques
c) excessive use of variable factor
d) All of the above

Ans – d)

4) A rational producer should opt to produce in __ stage.

a) increasing returns to scale
b) diminishing returns to scale
c) constant returns to scale
d) None of the above

Ans – b)

5) Which of the following is a variable factor of production in farming?

a) Farming Land
b) Labour
c) Equipment
d) Both b) and c)

Ans – d)

Explanation:- Labour and equipment are variable factors as they vary directly with the level of output.

6)

Assertion (A) In the case of disguised employment total physical product becomes constant.

Reason (R) When more people work at a place than required, additional workers do not contribute much to the output.

Alternatives:-

a) Both Assertion (A) and Reason (R) are true and Reasons (R) is the
the correct explanation of Assertion (A)

b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the
the correct explanation of Assertion (A)

c) Assertion (A) is true, but Reason (R) is false

d) Assertion (A) is false, but Reason (R) is true.

Ans – a)

Question – 2 (Case – Study)

Revenue is an important aspect of a producer’s behaviour. It indicates a firm’s receipts from sales. In other words, it also indicates the demand for a firm’s goods and services. More sales usually indicate more revenue but higher sale depends upon the form of market and elasticity of demand. Firms have better control over price when demand is inelastic.

i) In which form of market, average revenue is inelastic?

a) Perfect competition
b) Monopoly
c) Monopolistic
d) None of these

Ans – b)

Incremental revenue is always equal to price under _ market.

a) Perfect competition
b) monopoly
c) monopolistic
d) None of these

Ans – a)

2) Average revenue under monopolistic competition is elastic due to

a) lower price
b) greater choice
c) price control
d) All of these

Ans – b)

3) When average revenue is elastic, marginal revenue is

a) inelastic
b) also elastic
c) perfectly elastic
d) perfectly inelastic

Ans – b)

4) Assertion (A) Total Revenue and profits are equal under the market with a constant price.

Reason (R) When Price becomes constant, additional revenue becomes equal to average revenue.

Alternatives

a) Both Assertion (A) and Reason (R) are true and Reasons (R) is the correct explanation of Assertion (A)

b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)

c) Assertion (A) is true, but Reason (R) is false

d) Assertion (A) is false, but Reason (R) is true.

Ans – d)

6) __ curve represent the demand curve of a firm as mentioned
in the given paragraph.

a) Total revenue
b) Average revenue
c) Marginal revenue
d) None of the above

Ans – b)