AIM INSTITUTE

Theory of Production and Cost - Test

Mayank Dua
CA Foundation Total Marks - 50

ANSWER KEY
1. (a) Creating/Addition of Utility
2. (d) Performing an art in a theatre
3. (a) Tilling of soil.
4. (a) The services of a doctor are considered production.
5. (b) Production
6. (b) Creation of utility in matter
7. (d) Both (a) and (b)
8. (a) Intention
9. (d) All of the above.
10. (a) Inputs
11. (d) Land, Labour, Capital and Entrepreneurial ability
12. (a) Land
13. (d) It is produced by our forefathers.
14. (b) It is a mobile factor of production
15. (a) It is an active factor
16. (d) Land is perishable
17. (b) Heterogeneous
18. (c) Its supply is fixed
19. (b) Perfectly Inelastic, Relatively Elastic
20. (b) Leisure
21. (d) Labour is not mobile
22. (d) All of the above.
23. (a) A labourer cannot store his labour.
24. (b) Active
25. (c) Human skills and abilities
26. (a) Circulating
27. (d) Both (a) & (b)
28. (a) Savings, Mobilization of Savings and investment
29. (a) Capital formation
30. (c) Capital is nature’s gift
31. (d) All of the above
32. (d) All of the above
33. (b) Schumpeter
34. (a) Innovate
35. (c) Schumpeter
36. (a) Organic
37. (b) Economic
38. (d) Entrepreneur
39. (d) All of the above.
40. (a) Schumpeter
41. (c) The relationship between the quantities of inputs needed to produce a given level of output.
42. (a) The quantity of physical inputs and physical output of a firm
43. (b) The highest resulting output.
44. (a) Technical relationship between physical inputs and physical output.
45. (a) Purely a technical relationship between input & output
46. (d) All the above.
47. (b) Production function
48. (c) Production function
49. (d) All the above.
50. (d) All of the above.