PRESIDIUM GURGAON
SESSION 2024-25
SUBJECT –ECONOMICS PRACTICE WORKSHEET 2
CLASS: XI
TOPIC: COST & PRODUCTION FUNCTION
1. Suppose total revenue is rising at a constant rate as more and more units of a commodity are
sold, marginal revenue would be: (Choose the correct alternative
a) Greater than average revenue
b) Equal to average revence
c) Less than average revenue
d) Rising
2. Which of the following cost can never be zero?
a) Total variable cost
b) Marginal cost
c) Average variable cost
d) Average Fixed cost
3. If the demand curve of a firm is a horizontal straight line:
a) all firms will sell equal amount of a commodity
b) firms can differentiate their product
c) a firm can sell only a specified amount at the existing price
d) a firm can sell any amount at the existing price
4. Can MR be negative or zero.
a) Can’t say
b) No
c) Yes
d) Only negative but not zero
5. When Output increases, the gap between Total Cost and Total Variable Cost will:
A. Remains the same
B. Will also increase
C. Will diminish
D. Will finally become zero
6. Total cost of producing 5 units of output is ₹80. Average variable cost at this level is ₹10. The
Average Fixed Cost of producing 5 units of output would be:
A. ₹ 30 B. ₹20 C. ₹ 5 D. ₹6
7. When firm increases the employment of labour from 10 units to 15 units, The total Product
increases from 120 units to 150 units. The marginal product of labour at 15th units would be:
A. 30 B. 20 C. 10 D. 6
8. When Short Run Marginal Cost Curve intersects Short Run Average Cost Curve:
A. Short Run Average Cost curve would be increasing
B. Short Run Average Cost curve would be diminishing
C. Short Run Average Cost curve would be constant
D. Short Run Marginal Cost curve would be diminishing
9. What does the average fixed cost curve look like? Why does it look so?
Or
How does AFC behave as output is increased?
Or
What is the behaviour of average fixed cost as output increases?
10.What are the causes behind the law of diminishing returns to a factor?
11.Why is Long run Average Cost ‘U’ shaped?
12.What is the shape of AFC? Why is it so?
13. With the help of a diagram explain the relation between AVC,MC and AC ?
14.Using suitable diagram distinguish between TVC and TFC
15.Can the TFC influence the MC? Explain.
16. Why does SMC curve cut AVC curve at the minimum point of AVC curve?
17.Using a suitable diagram explain the relationship between TP and MP in its three stages of
law of variable proportion .
18. Why does the Average Fixed Cost curve never touch the “x” axis though it lies very close
to the x-axis?
19. The following table gives the total cost schedule of a firm. It Is also given that
the average fixed cost at 4 units of output is Rs. 5.
