Production and Costs Quiz - CBSE Class 12 Economics

Free practice quiz: Production and Costs (CBSE Class 12 Economics). 18 multiple-choice questions with answers and explanations. Play online, no sign-up needed.

Sample questions

1. What is the primary factor of production?

   1. Land
   2. Labor
   3. Capital
   4. Entrepreneurship
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   Answer: A. Land

   Land is considered the primary factor of production because it encompasses all natural resources.

2. What does the term 'total cost' refer to?

   1. Fixed cost only
   2. Variable cost only
   3. Sum of fixed and variable costs
   4. None of the above
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   Answer: C. Sum of fixed and variable costs

   Total cost is the combination of fixed costs, which do not change with output, and variable costs, which do change with output.

3. Which of the following is a characteristic of perfect competition?

   1. Few sellers
   2. Differentiated products
   3. Price takers
   4. High barriers to entry
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   Answer: C. Price takers

   In a perfectly competitive market, firms are price takers because they cannot influence the market price of their products.

4. Which cost is incurred even when production is zero?

   1. Variable cost
   2. Marginal cost
   3. Total cost
   4. Fixed cost
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   Answer: D. Fixed cost

   Fixed costs are incurred regardless of production levels, remaining constant even when output is zero.

5. In which market structure do firms have a downward-sloping demand curve?

   1. Perfect competition
   2. Monopoly
   3. Oligopoly
   4. All of the above
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   Answer: B. Monopoly

   Monopolistic firms face a downward-sloping demand curve as they are the only suppliers of the product, allowing them to set prices.

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