Cost of production of the producer is given by: (1) sum of wages paid to labourers. (2) sum of wages and interest paid on capital. (3) sum of wages, interest, rent and supernormal profit. (4) sum of wages, interest, rent and normal profit.

Cost of production of the producer is given by: (1) sum of wages paid to labourers. (2) sum of wages and interest paid on capital. (3) sum of wages, interest, rent and supernormal profit. (4) sum of wages, interest, rent and normal profit.
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(4) sum of wages, interest, rent and normal profit. Explanation: The following elements are included in the cost of production: (1) Purchase of raw machinery, (2) Installation of plant and machinery, (3) Wages of labor, (4) Rent of Building, (e) Interest on capital, (f) Wear and tear of the machinery and building, (g) Advertisement expenses, (h) Insurance charges, (i) Payment of taxes. (j) In the cost of production, the imputed value of the factor of production owned by the firm itself is also added, (k) The normal profit of the entrepreneur is also included In the cost of production.
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Cost of production of the producer is given by: (1) sum of wages paid to labourers. (2) sum of wages and interest paid on capital. (3) sum of wages, interest, rent and supernormal profit. (4) sum of wages, interest, rent and normal profit.

Description : Cost of production of the producer is given by: (1) sum of wages paid to labourers. (2) sum of wages and interest paid on capital. (3) sum of wages, interest, rent and supernormal profit. (4) sum of wages, interest, rent and normal profit.

Last Answer : sum of wages, interest, rent and normal profit.

Rent, interest on fixed capital, depreciation of building, taxes and wages of the permanent labourers constitute

Description : Rent, interest on fixed capital, depreciation of building, taxes and wages of the permanent labourers constitute

Last Answer : Ans. Fixed Costs

The degree of monopoly power is to be measured in terms of the firm's- (1) normal profit (2) supernormal profit (3) both normal and supernormal profit (4) selling price

Description : The degree of monopoly power is to be measured in terms of the firm's- (1) normal profit (2) supernormal profit (3) both normal and supernormal profit (4) selling price

Last Answer : (2) supernormal profit Explanation: Monopoly power implies the amount of discretion which a monopolist possesses to fix up the prices of his products and degree of control over his output decisions. ... the degree of monopoly power can be measured by the monopoly firm's super-normal profit.

The degree of monopoly power is to be measured in terms of the firm’s (1) normal profit (2) supernormal profit (3) both normal and supernormal profit (4) selling price

Description : The degree of monopoly power is to be measured in terms of the firm’s (1) normal profit (2) supernormal profit (3) both normal and supernormal profit (4) selling price 

Last Answer : supernormal profit

Enterpreneurial ability is a special kind of labour that - (1) is hired out to firms at high wages (2) organizes the process of production (3) produces new capital goods to earn interest (4) manages to avoid losses by continual innovation

Description : Enterpreneurial ability is a special kind of labour that - (1) is hired out to firms at high wages (2) organizes the process of production (3) produces new capital goods to earn interest (4) manages to avoid losses by continual innovation

Last Answer : (2) organizes the process of production Explanation: In economics, factors of production are the inputs to the production process. Factors of production' may also refer specifically to the 'primary factors', ... the other factors of production, land, labor, and capital, in order to make a profit.

Enterpreneurial ability is a special kind of labour that (1) is hired out to firms at high wages (2) organizes the process of production (3) produces new capital goods to earn interest (4) manages to avoid losses by continual innovation

Description : Enterpreneurial ability is a special kind of labour that (1) is hired out to firms at high wages (2) organizes the process of production (3) produces new capital goods to earn interest (4) manages to avoid losses by continual innovation

Last Answer : organizes the process of production

Which of the following are not fixed costs? (1) Rent on land (2) Municipal taxes (3) Wages paid to workers (4) Insurance charges

Description : Which of the following are not fixed costs? (1) Rent on land (2) Municipal taxes (3) Wages paid to workers (4) Insurance charges

Last Answer : (3) Wages paid to workers Explanation: In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such ... paid in wages, can often be varied, so this type of labour cost is a variable cost.

Which of the following are not fixed costs? (1) Rent on land (2) Municipal taxes (3) Wages paid to workers (4) Insurance charges

Description : Which of the following are not fixed costs? (1) Rent on land (2) Municipal taxes (3) Wages paid to workers (4) Insurance charges

Last Answer :  Wages paid to workers

Production function relates - (1) Cost to output (2) Cost to input (3) Wages to profit (4) Inputs to output

Description : Production function relates - (1) Cost to output (2) Cost to input (3) Wages to profit (4) Inputs to output

Last Answer : (4) Inputs to output Explanation: Production function specifies the output of a firm, an industry, or an entire economy for all combinations of inputs. The relationship of output to inputs is ... relates physical inputs to physical outputs, and prices and costs are not reflected in the function.

Production function relates (1) Cost to output (2) Cost to input (3) Wages to profit (4) Inputs to output

Description : Production function relates (1) Cost to output (2) Cost to input (3) Wages to profit (4) Inputs to output

Last Answer : Inputs to output

Minimum payment to factor of production is called - (1) Quasi Rent (2) Rent (3) Wages (4) Transfer Payment

Description : Minimum payment to factor of production is called - (1) Quasi Rent (2) Rent (3) Wages (4) Transfer Payment

Last Answer : (4) Transfer Payment Explanation: In economics, factors of production are the inputs to the production process. There are three basic factors of production: land, labour, capital. The payment for use and ... to keep a factor of production in its present use. It is also known as opportunity cost.

Minimum payment to factor of production is called (1) Quasi Rent (2) Rent (3) Wages (4) Transfer Payment

Description : Minimum payment to factor of production is called (1) Quasi Rent (2) Rent (3) Wages (4) Transfer Payment

Last Answer : Transfer Payment

The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Description : The main advantage of specialization results from (a) The economies of large scale production (b) The specializing country behaves like a monopoly © Smaller production runs resulting in lower unit costs. (d) High wages paid to foreign workers.

Last Answer : (a) The economies of large scale production

Which of these is/are not included in net domestic product at factor cost. (a) Wages or compensation of employees ; (b) Rent, interest, profits or operating surplus; (c) Mixed income ; (d) None

Description : Which of these is/are not included in net domestic product at factor cost. (a) Wages or compensation of employees ; (b) Rent, interest, profits or operating surplus; (c) Mixed income ; (d) None

Last Answer : (d) None

Given competitive conditions, a firm in the long run earn (a) Quasi-rent (b) Pure-rent (c) Normal profit (d) Economic profit

Description : Given competitive conditions, a firm in the long run earn (a) Quasi-rent (b) Pure-rent (c) Normal profit (d) Economic profit

Last Answer : (c) Normal profit

Pick out the wrong statement. (A) Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity) (B) Return on equity = profit after tax/net worth (C) Working capital turnover ratio = sales/net working capital (D) Total cost of production is more than net sales realisation (NSR) at breakeven point

Description : Pick out the wrong statement. (A) Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity) (B) Return on equity = profit after tax/net worth (C) Working ... /net working capital (D) Total cost of production is more than net sales realisation (NSR) at breakeven point

Last Answer : (D) Total cost of production is more than net sales realisation (NSR) at breakeven point

A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid

Description :  A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid

Last Answer : A. Cash Flows

Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : (4) increase in capital return Explanation: Interest rate increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate ... . All of these factors raise output and employment as well as investment and consumer spending.

Which from the following is not true when the interest rate in the economy goes up? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Description : Which from the following is not true when the interest rate in the economy goes up? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Last Answer : (4) Return on capital increases Explanation: The interest rate is the cost of demanding or borrowing loanable funds. Alternatively, the interest rate is the rate of return from supplying or lending loanable funds. ... rate per unit of time, which is why it is called the rate of return on capital.

Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : increase in capital return

Which from the following is not true when the interest rate in the economy goes up ? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Description : Which from the following is not true when the interest rate in the economy goes up ? (1) Saving increases (2) Lending decreases (3) Cost of production increases (4) Return on capital increases

Last Answer : Return on capital increases

Under hill cost pricing, price is determined - (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revem (3) by adding normal profit to the marginal cost (4) by the total al cost of production

Description : Under hill cost pricing, price is determined - (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revem (3) by adding normal profit to the marginal cost (4) by the total al cost of production

Last Answer : (1) by adding a margin to the average cost Explanation: Full cost pricing is a practice where the price of a product is calculated by a firm on the basis of its direct costs per unit of output ... is known as 'full-cost' pricing. The price is equal to 'full' cost, including an acceptable profit.

Under full cost pricing, price is determined (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revenue (3) by adding normal profit to the marginal cost (4) by the total cost of production

Description : Under full cost pricing, price is determined (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revenue (3) by adding normal profit to the marginal cost (4) by the total cost of production 

Last Answer :  by adding a margin to the average cost

'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Description : 'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Last Answer : (1) expected rate of return on new investment Explanation: The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before ... partly on expectations of future yields and partly on the actual price of the capital good concerned.

‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Description : ‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Last Answer :  expected rate of return on new investment

8. If worker A earns more in wages than worker B, it could be because: a. The product made by worker A sells for a higher price than that made byworker Bb. Worker A uses more capital per worker than worker Bc. Worker A has more natural ability than worker Bd. All of the above

Description : 8. If worker A earns more in wages than worker B, it could be because: a. The product made by worker A sells for a higher price than that made worker B b. Worker A uses more capital per worker than worker B c. Worker A has more natural ability than worker B d. All of the above

Last Answer : d. All of the above

The remuneration of the entrepreneur in production is - (1) Pure profit (2) Gross profit (3) Net profit (4) Super-normal profit

Description : The remuneration of the entrepreneur in production is - (1) Pure profit (2) Gross profit (3) Net profit (4) Super-normal profit

Last Answer : (3) Net profit Explanation: Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors ... commodities on the basis of demand, looking after efficient distribution) from the gross profit.

The remuneration of the entrepreneur in production is (1) Pure profit (2) Gross profit (3) Net profit (4) Super-normal profit

Description : The remuneration of the entrepreneur in production is (1) Pure profit (2) Gross profit (3) Net profit (4) Super-normal profit

Last Answer : Net profit 

Which of the following cannot be treated as revenue expenditure? A. Cost of goods purchased for resale. B. Wages paid for the erection of plant and machinery. C. Obsolescence cost. D. Expenses incurred by way of repairs of existing assets which do not in any way add to their earning capacity.

Description : Which of the following cannot be treated as revenue expenditure? A. Cost of goods purchased for resale. B. Wages paid for the erection of plant and machinery. C. Obsolescence cost. D. Expenses incurred by way of repairs of existing assets which do not in any way add to their earning capacity.

Last Answer : B. Wages paid for the erection of plant and machinery.

The following is (are) the indirect labour cost(s) A. Wages paid to storekeeper B. Salary of works manager C. Wages paid to gatekeeper D. All of the above

Description : The following is (are) the indirect labour cost(s) A. Wages paid to storekeeper B. Salary of works manager C. Wages paid to gatekeeper D. All of the above

Last Answer : D. All of the above

Conversion cost is the sum total of: A. Direct material cost and direct wages cost B. Direct wages, direct expenses and factory overheads C. Indirect wages and factory overheads D. Indirect wages, direct wages & factory overheads

Description : Conversion cost is the sum total of: A. Direct material cost and direct wages cost B. Direct wages, direct expenses and factory overheads C. Indirect wages and factory overheads D. Indirect wages, direct wages & factory overheads

Last Answer : C. Indirect wages and factory overheads

ho defined 'Rent' as that portion or produce of the earth which is paid to the landlord for the use of original and indestructible power of the soil? (1) Ricardo (2) Marshall (3) Keynes (4) Plgou

Description : ho defined 'Rent' as that portion or produce of the earth which is paid to the landlord for the use of original and indestructible power of the soil? (1) Ricardo (2) Marshall (3) Keynes (4) Plgou

Last Answer : (1) Ricardo Explanation: In his The Principles of Political Economy and Taxation (1821), David Ricardo stated: "Rent is that portion of the produce of the earth, which is paid to the landlord for ... in popular language, the term is applied to whatever is annually paid by a farmer to his landlord.

Which of the following is not included in the National Income? (1) Imputed rent of owner-occupied houses (2) Government expenditure on making new bridges (3) Winning a lottery (4) Commission paid to an agent for sale of house

Description : Which of the following is not included in the National Income? (1) Imputed rent of owner-occupied houses (2) Government expenditure on making new bridges (3) Winning a lottery (4) Commission paid to an agent for sale of house

Last Answer : (3) Winning a lottery Explanation: National income is the total value a country's final output of all new goods and services produced in one year. Transfer payments are not a ... pensions, charity, scholarships etc. Privatesector transfers include charitable donations and prizes to lottery winners.

Rent is a factor payment paid to - (1) land (2) restaurant (3) building (4) factory

Description : Rent is a factor payment paid to - (1) land (2) restaurant (3) building (4) factory

Last Answer : (1) land Explanation: Factor Payments refer to payments made to scarce resources, or the factors of production (labour, capital, land, and entrepreneurship), in return for productive services. Wages ... of capital rent is the services for land, and profit is the factor payment to entrepreneurship.

Who defined ‘Rent’ as that portion or produce of the earth which is paid to the landlord for the use of original and indestructible power of the soil ? (1) Ricardo (2) Marshall (3) Keynes (4) Pigou

Description : Who defined ‘Rent’ as that portion or produce of the earth which is paid to the landlord for the use of original and indestructible power of the soil ? (1) Ricardo (2) Marshall (3) Keynes (4) Pigou

Last Answer : Ricardo

Which of the following is not included in the National Income? (1) Imputed rent of owner-occupied houses (2) Government expenditure on making new bridges (3) Winning a lottery (4) Commission paid to an agent for sale of house

Description : Which of the following is not included in the National Income? (1) Imputed rent of owner-occupied houses (2) Government expenditure on making new bridges (3) Winning a lottery (4) Commission paid to an agent for sale of house 

Last Answer : Winning a lottery

Rent is a factor payment paid to (1) land (2) restaurant (3) building (4) factory

Description : Rent is a factor payment paid to (1) land (2) restaurant (3) building (4) factory

Last Answer : land

Part of company‟s earning or profit which is paid out to share holders is known as _______ A. Premium B. Dividend C. Bonus D. Sum Assured E. Return

Description : Part of company‟s earning or profit which is paid out to share holders is known as _______ A. Premium B. Dividend C. Bonus D. Sum Assured E. Return

Last Answer : B. Dividend Explanation: A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, it can re-invest ... business (called retained earnings), and pay a fraction of the profit as a dividend to shareholders.

Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Description : Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Last Answer : (C) At breakeven point, NSR is more than the total production cost

Given the money wages, if the price level in an economy increases, then the real wages will - (1) increase (2) decrease (3) remain constant (4) become flexible

Description : Given the money wages, if the price level in an economy increases, then the real wages will - (1) increase (2) decrease (3) remain constant (4) become flexible

Last Answer : (2) decrease Explanation: If workers receive a higher nominal wage and the price level does not change, then the real purchasing power of their wages is higher and they are inclined to increase the quantity of labor supplied.

Given the money wages, if the price level in an economy increases, then the real wages will (1) increase (2) decrease (3) remain constant (4) become flexible

Description : Given the money wages, if the price level in an economy increases, then the real wages will (1) increase (2) decrease (3) remain constant (4) become flexible

Last Answer : decrease

The opportunity cost of a factor of production is - (1) what it is earning in its present use. (2) what it can earn in the long period. (3) what has to be paid to retain it in its present use. (4) what it can earn in some other use.

Description : The opportunity cost of a factor of production is - (1) what it is earning in its present use. (2) what it can earn in the long period. (3) what has to be paid to retain it in its present use. (4) what it can earn in some other use.

Last Answer : (4) what it can earn in some other use. Explanation: The opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between ... given limited resources. It is equivalent to what a factor could earn for the firm in alter-native uses.

The opportunity cost of a factor of production is (1) what it is earning in its present use. (2) what it can earn in the long period. (3) what has to be paid to retain it in its present use. (4) what it can earn in some other use.

Description : The opportunity cost of a factor of production is (1) what it is earning in its present use. (2) what it can earn in the long period. (3) what has to be paid to retain it in its present use. (4) what it can earn in some other use.

Last Answer : what it can earn in some other use.

The sum total of production of goods and services in the three sectors in a given year is called______. (a) Gross National Income (b) National Income (c) Net Domestic Product (d) Gross Domestic Product

Description : The sum total of production of goods and services in the three sectors in a given year is called______. (a) Gross National Income (b) National Income (c) Net Domestic Product (d) Gross Domestic Product

Last Answer : (d) Gross Domestic Product

Epx = Percentage change in Qy / Percentage change in Px The above relationship is : A.Arc Cross Price Elasticity B.Cost Output C.Cost Profit D.Capital Budgeting

Description : Epx = Percentage change in Qy / Percentage change in Px The above relationship is : A.Arc Cross Price Elasticity B.Cost Output C.Cost Profit D.Capital Budgeting

Last Answer : A.Arc Cross Price Elasticity

A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal efficiency of capital © The cost of borrowing is less than marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.

Description : A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal ... marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.

Last Answer : (a) The cost of borrowing equals marginal efficiency of capital

What would you consider a good idea for a useless "supernormal" skill or ability?

Description : What would you consider a good idea for a useless "supernormal" skill or ability?

Last Answer : I can write backwards, with perfect cursive penmanship—an utterly useless and meaningless skill.

‘Those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received there from, together with interest on such profits, but shall not include profits due to improvements made but the person in wrongful possession’ (a) Means profit (b) Interest (c) Principal sum (d) None of the above

Description : Those profits which the person in wrongful possession of such property actually  received or might with ordinary diligence have received there from, together with  interest on such profits, but shall not include profits ... (a) Means profit (b) Interest (c) Principal sum (d) None of the above

Last Answer : (a) Means profit

Equilibrium price means - (1) Price determined by demand and supply (2) Price determined by Cost and Profit (3) Price determined by Cost of production (4) Price determined to maximize profit

Description : Equilibrium price means - (1) Price determined by demand and supply (2) Price determined by Cost and Profit (3) Price determined by Cost of production (4) Price determined to maximize profit

Last Answer : (1) Price determined by demand and supply Explanation: Equilibrium price is a state in economy where the supply of goods matches demand. When a major index experiences a period of consolidation or sideways ... short, it is the market price at which the supply of an item equals the quantity demanded.

Equilibrium price means (1) Price determined by demand and supply (2) Price determined by Cost and Profit (3) Price determined by Cost of production (4) Price determined to maximise profit

Description : Equilibrium price means (1) Price determined by demand and supply (2) Price determined by Cost and Profit (3) Price determined by Cost of production (4) Price determined to maximise profit

Last Answer :  Price determined by demand and supply