1) How output of a business responds to change in factor input is called:

1. Diseconomies of scale
2. Returns to scale
3. Returns to factor
4. Economics of scale

2) A graph showing all of combinations of capital and labour available for a given total cost is known as:

1. Isoquant
2. Expenditure set
3. Isocost line
4. Budget constraint

3) Which of the following indicates optimal consumption point for the consumer

1. Py/Px> ∆Y/∆X = MUx/MUy
2. Px/Py = zero = MUx/MUy
3. Px/Py = ∆X/∆Y > MUx/MUy
4. Px/Py = ∆Y/∆X > MUx/MUy

4) An isoquant that is further from the origin represents

1. Lesser output
2. None of above
3. Greater output
4. No change in output

5) In-case of increasing returns to scale isoquants:

1. Undergo no change
2. Become closer and closer to each other
3. Are equally spaced
4. Become further and further apart from each other

6) If marginal physical product is equal to average physical product

1. The average physical product will not change
2. Average variable costs will fall
3. The total physical product will fall
4. Total revenue will fall

7) The law which explains that additional satisfaction falls by the consumption of more and more units of a good, is called:

1. Law of supply
2. Law of diminishing marginal utility
3. Law of demand
4. Law of Elasticity

8)   _______ is the rate at which a firm can substitute capital for labor and hold output constant

1. Marginal rate of substitution
2. Diminishing marginal returns
3. Marginal rate of technical substitution
4. Marginal rate of production

9) Procter & Gamble Pakistan (Pvt) Ltd is producing 500 units of soap. To produce these units company bears RS. 8000 for total fixed cost and Rs. 2000 for total variable cost. What will be the total cost in this case

1. 6000
2. 10,000
3. 2000
4. 8000

10) In case of economics of scale long run total cost (LRTC) curve is:

1. Downward sloping with falling slope
2. Downward sloping with rising slope
3. Upward sloping with falling slope
4. Upward sloping with rising slope