MCQs For NCERT Class 12 Economics Chapter 3 Production and Costs

Please refer to the MCQ Questions for Class 12 Economics Chapter 3 Production and Costs with Answers. The following Production and Costs Class 12 Economics MCQ Questions have been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Economics with Answers for all chapters in your NCERT Class 12 Economics book.

Production and Costs Class 12 MCQ Questions with Answers

See below Production and Costs Class 12 Economics MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. Law of variable proportion is related to :
(a) Short-run 
(b) Long-run
(c) Both short-run and long run
(d) Very Long-run

Question. With which condition, firm will get maximum profit ?
(a) Where MR = MC
(b) Where MC cuts MR from below
(c) Both (a) and (b)
(d) None of the above

Question. In final equilibrium of firm:
(a) MC cuts MR from above
(b) MC cuts MR from below
(c) Both (a) and (b) are
(d) None of the above is true

Question. In which market MR may become zero or negative ?
(a) Monopoly
(b) Monopolistic Competition
(c) Both (a) and (b)
(d) Perfect Competition

Question. The average fixed cost at 5 units of output is Rs. 20. Average variable cost at 5 units of output is Rs. 40. Average cost of producing 5 units is:
(a) Rs. 20
(b) Rs. 40
(c) Rs. 56
(d) Rs. 60

Question. When average cost is decreasing what status marginal cost has as compared to average cost ?
(a) MC > AC
(b) MC = AC
(c) MC ≤ AC
(d) MC ≠ AC

Question. MR is shown as:
(a) ΔTR/ΔQ
(b) TR/Q
(c) ΔAR/Q
(d) None of these

Question. Which factors among following we find in short-run production process ?
(a) Fixed Factors
(b) Variable Factors
(c) Both (a) and (b)
(d) None of these

Question. In which stage of production a rational producer likes to operate in shot-run production ?
(a) First Stage
(b) Second Stage
(c) Third Stage
(d) None of these

Question. 14 big scheduled commercial banks in India were nationalised in:
(a) 1949
(b) 1955
(c) 1969
(d) 2000

Question. Determinating factor of supply of goods is:
(a) Price of Goods
(b) Price of Related Goods
(c) Price of Factor of Production
(d) All the above

Question. If other things being same, what does the positive relationship between price and supply quantity signify ?
(a) Law of Demand
(b) Elasticity of Supply
(c) Law of Supply
(d) Supply Function

Question. The elasticity of a straight line supply curve originating from the centre of origin is:
(a) equal to unity 
(b) greater than unity
(c) Less than unity,
(d) equal to zero

Question. Which of the following is not fixed cost ?
(a) Insurance Premium
(b) Interest
(c) Cost of Raw Material
(d) Rent of the Factory

Question. In production function, production is a function of:
(a) Price
(b) Factors of Production
(c) Total Expenditure
(d) None of these

Question. Through which method we can withdraw money from the bank:
(a) Drawing letter
(b) Cheque
(c) A.T.M.
(d) All of the above

Question. Which one is the Bank of the Public?
(a) Commercial Bank
(b) Central Bank
(c) Both (a) and (b)
(d) None of the above

Question. Fixed cost is also known as:
(a) Variable cost
(b) Actual cost
(c) Supplementary cost
(d) Short-term cost

Question. What are the alternative measures of money supply in India?
(a) M1
(b) M2
(c) M3 and M4
(d) All of these

Question. Which of the following is the apex bank of India?
(a) RBI
(b) SBI
(c) SBP
(d) PNB

Question. What is the defect of the barter system?
(a) Lack of double coincidence of wants
(b) Difficulty in the measurement of value
(c) Difficulty in store of value
(d) All of these

Question. In order to encourage investment in the economy, the Central Bank may ________
(a) Reduce Cash Reserve Ratio
(b) Increase Cash Reserve Ratio
(c) Sell Government securities in the open market
(d) Increase Bank Rate

Question. What are the advantages of the Barter System?
(a) Simple System
(b) More Mutual Co-operation
(c) No Economic Disparities
(d) All the above

Question. What is the Central Bank of India?
(a) Commercial Bank
(b) Central Bank
(c) Private Bank
(d) None of these

Question. Which is the major objective of credit control?
(a) To maintain Price Stability
(b) To stabilize Exchange Rate
(c) To production and Employment
(d) All the above

Question. “Money is a pivot around which the whole economy clusters.” Who said it?
(a) Keynes
(b) Robertson
(c) Marshall
(d) Hawtrey

Question. Who regulates the money supply?
(a) Govt, of India
(b) Reserve Bank of India
(c) Commercial Bank
(d) Planning Commission

Question. Which committee was constituted for suggesting consumer service improvements in banks?
(a) Goiporia Committee 
(b) Raja Chelliah Committee
(c) Verma Committee
(d) Chakrabarty Committee

Question. Which is the Agency Function of Commercial Banks?
(a) Advancing Loans
(b) Accepting Deposits
(c) Act as Trustee
(d) Locker Facility

Question. Monetary policy is related with:
(a) Public Expenditure
(b) Taxes
(c) Public Debt
(d) Open market operations