Chapter Exam

Unit 4: Production Analysis — Online MCQ Test

Q: What is meant by a production function in economics?

Answer: B. The relationship between inputs and output — A production function shows the technical relationship between inputs used and the output produced. It explains how output changes when inputs change.

Q: Which law states that when one input is increased while other inputs remain fixed, output first rises at an increasing rate, then at a diminishing rate?

Answer: C. Law of Variable Proportions — The Law of Variable Proportions applies in the short run when only one factor is varied and others are fixed. It explains stages of increasing, diminishing, and negative returns.

Q: If a firm increases all inputs by 10% and output also increases by 10%, it is called:

Answer: B. Constant returns to scale — When output changes in the same proportion as all inputs, the firm experiences constant returns to scale. This is a long-run concept.

Q: A factory adds more workers to a fixed number of machines. Output increases at first, but after a point, output per worker starts falling. This is due to:

Answer: B. Law of diminishing marginal returns — When additional workers are added to fixed machines, the productivity of each extra worker eventually falls. This is the diminishing marginal returns phase under variable proportions.

Q: Which of the following is the best example of a variable cost?

Answer: C. Wages of temporary workers — Variable costs change with the level of output. Wages paid to temporary workers usually rise when more production is required.

ECONOMICS · CLASS 11 INTERMEDIATE 1 YEAR · Telangana State Board

Practice Unit 4: Production Analysis with a free chapter-wise online MCQ test for Telangana State Board CLASS 11 INTERMEDIATE 1 YEAR ECONOMICS. This chapter covers: This chapter details production function Law of Variable Proportions Law of Returns to Scale production cost concepts revenue concepts and economies of scale.. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Unit 4: Production Analysis — Important Questions & Answers (FAQ)

Frequently asked questions from Telangana State Board CLASS 11 INTERMEDIATE 1 YEAR ECONOMICS — Unit 4: Production Analysis, with answers and explanations. These are sample questions; the exam has its own separate question set.

What is meant by a production function in economics?

A. The relationship between money income and demand
B. The relationship between inputs and output ✓
C. The relationship between price and supply
D. The relationship between cost and revenue

Answer: B. The relationship between inputs and output
A production function shows the technical relationship between inputs used and the output produced. It explains how output changes when inputs change.

Which law states that when one input is increased while other inputs remain fixed, output first rises at an increasing rate, then at a diminishing rate?

A. Law of Demand
B. Law of Supply
C. Law of Variable Proportions ✓
D. Law of Returns to Scale

Answer: C. Law of Variable Proportions
The Law of Variable Proportions applies in the short run when only one factor is varied and others are fixed. It explains stages of increasing, diminishing, and negative returns.

If a firm increases all inputs by 10% and output also increases by 10%, it is called:

A. Increasing returns to scale
B. Constant returns to scale ✓
C. Diminishing returns to scale
D. Negative returns to scale

Answer: B. Constant returns to scale
When output changes in the same proportion as all inputs, the firm experiences constant returns to scale. This is a long-run concept.

A factory adds more workers to a fixed number of machines. Output increases at first, but after a point, output per worker starts falling. This is due to:

A. Law of demand
B. Law of diminishing marginal returns ✓
C. Returns to scale
D. Economies of scale

Answer: B. Law of diminishing marginal returns
When additional workers are added to fixed machines, the productivity of each extra worker eventually falls. This is the diminishing marginal returns phase under variable proportions.

Which of the following is the best example of a variable cost?

A. Depreciation on machinery
B. Factory rent
C. Wages of temporary workers ✓
D. Insurance premium

Answer: C. Wages of temporary workers
Variable costs change with the level of output. Wages paid to temporary workers usually rise when more production is required.

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