TN STATEBOARD 11th ECONOMICS CHAPTER 3 - PRODUCTION ANALYSIS ADDITIONAL QUESTIONS
PART A - MCQ 50 QUESTIONS
1. Who Said “Labour is essentially a numeracies”? Ricardo
2. Who told, Labour is a value and it is the basis for
surplus value”? Karl Marx
3. Who quoted “Capital is a produced means of Production? Bohm Bawerk
4. What leads to the creation of value Production
5. When is the average cost of production low? Large Scale
6. What are the factors of Production Land, Labour, Capital
7. What is production minus consumption called? Saving
8. What are the secondary factors of production? Capital, Organisaiton
9. What is the Characteristic of land? Permanent
10. What is the Characteristic of Labour? Animate, Active, Inseparable from Owner
11. What is C + V+ S ? Capital
12. Which factor is a means and an End? Labour
13. Which factor is immovable? Land
14. Which factor has less bargaining power? Labour
15. How is financial capital raised? Debt, Equity issues
16. What is the function of an Entrepreneur? Initiation, Innovation, Co-ordination
17. What Can not be insured ? Uncertainty
18. When can new firms enter the industry? Long Run
19. AP = ? TP/N
20. Which curve is always positive? TP
21. When is there no difference between fixed and variable
factor? Long Run
22. When input increases by 10% and Output increases by 10% Constant
23. Who divided economics into internal and external? Marshall
24. What is the other name for isoquant? Equal product curve, Product indifference
curve
25. What is the assumption of isoquant? Only 2 factors are used, No change in technology
26. If there is diminishing MRTS, what is the shape of
isoquant downward sloping
27. If there is constant MRTS, what is the Shape of isoquant
Straight Line
28. What is a combination of inputs which show same amount
of cost called Iso cost line
29. What is iso cost line also called? Iso price line, Iso Income line, Total outlay curve
30. Who developed production function? Cobb and Douglas
31. Cobb Douglas production is Linear Homogeneous Production function.
32. In Cobb Douglas production elasticity of substitution
between the factors is 1
33. When (A + B) < 1 Diminishing
34. Which factor influences supply Technology, Price of labour,
35. When price increase, what happens to supply? Increase
36. If a rise in price is anticipated in future, present
supply Decrease
37. Which triggers an increase in supply? New Technology, Subsidy discovery of new
raw material
38. How many types of elasticity of supply are there? Five
39. How is Elasticity of supply for durables? High
40. How is elasticity of supply in the long period High
41. Annual Income flows are called Annuities
42. Education and training given to labour is Human Capital
43. Production means overall increase in the creation of Utility
44. Bank deposits, shares, debentures and other monetary
instruments are called Money Capital
45. At the point of inflexion, the marginal product is Maximum
46. Total product increases Up to the point where marginal
product is Zero
47. The two words “ISO” and Quant are derived from Greek Language
48. Land and Labour are the Primary factors of production.
49. Organizational
is a Special form of Labour.
50. Successful
Entrepreneur attract new customers.
Part – B
Answer the following questions in one or two sentences
Question 1.
What are the characteristics of capital?
Answer:
Capital is a man-made factor
Capital is mobile between places and persons
Capital is a passive factor of production
Capital’s supply is elastic
Capital’s demand is a derived demand
Capital is durable
Question 2.
What is the land?
Answer:
Land means all gifts of nature owned and controlled by human
beings which yield an income.
Question 3.
Explain the law of variable proportions assumptions?
Answer:
The Law of Variable Proportions is based on the following
assumptions.
Only one factor is variable while others are held constant.
All units of the variable factor are homogeneous.
The product is measured in physical units.
There is no change in the state of technology.
There is no change in the price of the product.
Question 4.
What is the total product?
Answer:
Total product is the summation of marginal products.
TP = ∑MP
Question 5.
What is average product?
Answer:
Average product refers to the output per unit of the input.
Question 6.
What is diseconomies of scale?
Answer:
Diseconomies of scale are a disadvantage to a firm or
industry or organisation. This necessarily increases the cost of production.
Question 7.
What are Iso-quants ?
Answer:
An Iso-quant curve can be defined as the locus of points
representing various combinations of two inputs yielding the same output.
Part – C
Answer the following questions in One Paragraph
Question 1.
State the characteristics of labour.
Answer:
Labour is an active factor of production.
Labour may be manual or intellectual.
Labour is perishable.
Labour is inseparable from the labourer.
Labour is less mobile.
Labour is a means as well as an end.
Labour units are heterogeneous.
Labour has weak bargaining power.
Question 2.
Define Iso – quant, and Iso – quants Assumptions?
Answer:
Definition of Iso – quant:
According to Ferguson, “An Iso – quant is a curve showing
all possible combinations of inputs physically capable of producing a given
level of output”.
Assumptions:
It is assumed that only two factors are used to produce a
commodity.
Factors of production can be divided into small parts.
The technique of production is constant.
The substitution between the two factors is technically
possible. That is, the production function is of “variable proportion” type
rather than a fixed proportion.
Under the given technique, factors of production can be used
with maximum efficiency.
Question 3.
Who is an entrepreneur?
Answer:
An entrepreneur is a person who combines land, labour and
capital in the production process to earn a profit. He not only runs the
business but bears the risk of the business.
Question 4.
Differentiate the short period and long period.
Answer:
The short-run is the period where some inputs are variable.
Another feature is that firms do not enter or exit the industry. The long-run
is the period where all the inputs are variable. It is featured by the entry of
new firms and the exit of existing firms from the industry.
Question 5.
Name the classification of a production function.
Answer:
Production function may be classified into two.
Short-run production function as illustrated by the law of
variable proportions.
Long-run production function as explained by the laws of
returns to scale.
Question 6.
What is an Iso-quant map?
Answer:
An Iso-quant map has different Iso-quant curves representing
the different combinations of factors of production, yielding the different
levels of output. An Iso-quant map is a family of Iso-quants..
Part – D
Answer the following questions in about a page
Question 1.
Explain the law of supply with a diagram.
Answer:
1. Law of supply:
The Law of supply describes a direct relationship between
the price of a good and the supply of that good.
2. Definition:
“Other things remaining the same, if the price of a commodity
increases its quantity supplied increases and if the price of a commodity
decreases, quantity supplied also decreases”.
3. Supply function:
Q = f (Px, Pr, Pr T, O, E)
Qs – Quantity supplied of x commodity
Px – Price of x commodity
Pr – Price of related goods
Pf – Price of factors of production.
T – Technology
O – Objective of the producer.
E – Expected price of the commodity
Assumptions:
There is no change in the prices of factors of production
and capital goods.
Natural resources, technology, climate, political situations
and tax policy remain unchanged.
Prices of substitutes are constant.
Supply schedule:
A supply schedule shows the different quantities of supply
at different prices
Supply curve:
The quantum supplied is represented on X axis. And the price
of the commodity is represent on the Y axis
As the price of the commodity increases, the quantum
supplied of the commodity also increases. Thus the supply curve has a positive
slope. The points such as e, d, c, b and a on the supply curve SS, represent
various quantities of different prices.
Question 2.
Explain the factors determining supply.
Answer:
1. Price of the commodity:
Higher the price larger the supply Price is the incentive
for the producers and sellers to supply more.
2. Price of other commodities:
The supply of a commodity not only depends upon its price
but also prices of other commodities. For instance if the price of commercial
crops increases, the supply of food crops may decrease.
3. Price of factors:
When the input prices go up, this results in rise in cost
and so supply will be affected.
4. Price expectations:
The expectation over future prices determines present
supply.
5. Technology:
With advancement in technology, production level improves,
average cost declines and as a result supply level increases.
6. Natural factors:
In agriculture, natural factors like a monsoon, climate,
etc., play a vital role in determining the production level.
7. Discovery of new raw materials:
The discovery of cheaper and high-quality raw materials
tends to increase the supply of the product.
8. Taxes and subsidies:
Subsidies encourage the producers to produce more whereas
taxes kill the ability and willingness to produce more.
9. The objective of the firm:
When the goal of the firm is sales maximization or improving market share, the supply of the product is likely to be higher.