Production Function and the Laws of Returns: AP Microeconomics Online Test

For which of the following fields, is the Cobb-Douglas Production Function applicable? I Agriculture II Industries III Experiments in Agriculture
I only
II only
III only
I and II
I and III
If a proportional change in input combination results in a proportional change in output, the returns to scale will be: I Increasing Returns II Decreasing Returns III Constant Returns
I only
II only
III only
I and II
II and III
For the Firm’s Production Function, “the Short Period” is:
Less than one week
From one month to three months
From one month to six months
From one month to twelve months
None of these
If the firm’s production function is homogenous, the Law of Constant Returns to Scale applies
True
False
True when the Homogenous Production Function is of the First degree
False when the Homogenous Production Function is of the First degree
Incomplete information
In real practice, the Production Function is empirically measured with the help of:
Experiments conducted in agriculture
Technical information provided by engineers
Statistical analysis of cross sections
Statistical analysis of time series data
All of the above
If the production process has increasing returns to scale, the returns to a variable factor of production are:
Double of the returns to the fixed factor
Half of the returns to the fixed factor
Increasing at double the rate
Decreasing at double the rate
Cannot be determined unless the quantum of increasing returns is known
The input combination of a production process has 20 percent fixed costs, 30 percent raw materials and 10 percent labour. Fixed assets remain constant but the quantity of other inputs is increased by 50 percent. This results in:
Law of variable proportions
Returns to scale
Constant returns to scale
Decreasing returns to scale
Increasing returns to scale
Which concept in the Theory of Consumption is similar to the concept of Expansion Path in the Theory of Production?
Price Line
Income Consumption Curve
Iso Cost Lines
Price Consumption Curve
None of these
Returns to scale are applicable if:
The quantity of some inputs is changed, while that of others remains constant
The quantity of all inputs are changed
The quantity of just one input is changed
The quantity of all inputs is not changed
All of the above
The ‘Expansion Path’ is the locus of points of the producer’s equilibrium when:
The cost of both inputs fall
Money outlay of the entrepreneur is changed
The price of input X is changed
The state of technology is changed
All of the above
Description:

This test on Microeconomics assesses your knowledge on the basics of the Production Function, the Expansion Path and most important Returns to Scale. The test also contains a few questions on the Short term Production Function. This helps you recall and revise the difference between the two Laws of Returns: Law of Variable Proportions and Law of Returns to Scale. Attempt all Multiple Choice questions in just 7 min. This test is a must for any student of AP Microeconomics. It offers a quick revision of the concept of Production Function.

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