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1. |
Every factor of production gets reward equal to: |
A. |
Value of average product |
B. |
Value of marginal product |
C. |
Value of total product |
D. |
Total revenue |
Answer: Option A
Explanation:
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2. |
Under perfect competition, demand for a factor is its: |
A. |
MRP curve |
B. |
ARP curve |
C. |
TRP curve |
D. |
TR - TC |
Answer: Option A
Explanation:
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3. |
We should employ units of a factor to a point where: |
A. |
MR is negative |
B. |
MP is equal to price of the factor |
C. |
MP is positive |
D. |
MP is rising |
Answer: Option B
Explanation:
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4. |
If marginal product of labour rises because of new technology: |
A. |
Wages will rise |
B. |
Wages will fall |
C. |
Wages will be unaffected |
D. |
May rise or fall |
Answer: Option A
Explanation:
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5. |
One of the following is NOT a assumption of the marginal productivity theory: |
A. |
Units of factor are homogeneous |
B. |
Mobility of factor |
C. |
Low price of factor |
D. |
Perfect competition |
Answer: Option C
Explanation:
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6. |
Increasing the minimum wage for workers will: |
A. |
Sole the unemployment problem |
B. |
Result in scarcity of workers |
C. |
Cause a substitution of capital for labour |
D. |
Decrease the MP of those workers |
Answer: Option C
Explanation:
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