Micro

Production & Costs

Easy

Which of the following central problems deals with the choice of technique of production?

What to Produce?

How to produce?

For whom to produce?

Problem of full employment of resources.

✅ Correct Option: 2

Option 1: What to Produce? -> Deals with deciding which goods and services to produce.

Option 2: How to produce? -> Deals with the choice of technique of production (labor-intensive vs capital-intensive methods).

Option 3: For whom to produce? -> Deals with distribution of output among people in society.

Option 4: Problem of full employment of resources -> Deals with utilizing all available resources efficiently.

Hence, Option 2: How to produce? -> This central problem specifically addresses the choice of technique of production. It involves deciding whether to use labor-intensive methods (more workers, less machinery) or capital-intensive methods (more machinery, less workers), and what combination of resources should be used to produce goods and services most efficiently. This is a fundamental decision every economy must make based on resource availability, costs, and technological capabilities. -> correct

2025: 26 May Shift 2

A firm is operating in a market where it can sell more only by lowering the price of the good. Arrange the changes in total revenue of this firm in a sequential order.

(A) Total revenue falls.

(B) Total revenue starts from origin.

(D) Total revenue reaches its maximum.

Choose the correct answer from the options given below:

2026: 13 May Shift 1

The difference between firms total revenue and total cost is called?

2025: 22 May Shift 1

In the short run and long run, the shapes of the cost curves for a typical firm are defined as

(A). SMC curve cuts the AVC curve from below at its minimum point.

(B). LRAC curve cuts the LRMC curve from below at the minimum point of LRMC.

(C). SMC curve cuts the SAC curve from below at the minimum point of SAC.

(D). Average fixed cost curve is downward sloping.

Choose the correct answer from the options given below:

2025: 22 May Shift 2

From the following statements about a firm's supply curve, select the correct statements:

(A) Technological progress is expected to shift the supply curve of a firm to the right.

(B) An increase in input prices is expected to shift the supply curve of a firm to the left.

(D) The imposition of a unit tax shifts the supply curve of a firm to the left.

Choose the correct answer from the options given below:

2025: 13 May Shift 2

In a long run average cost curve which point is said to be the constant return to scale?

2026: 13 May Shift 2

Keeping all other inputs constant, when a firm changes the labour from 3 to 4, the total product changes from 40 to 50. What is the marginal product of the 4th unit of labour?

Which of the following central problems deals with the choice of technique of production?

Solution

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