(A) Economies of scale.
(B) Constant returns to scale.
(C) Diseconomies of scale.
(D) A violation of the law of diminishing returns.
Tag: Economics Mcqs With Answers
In a shutdown decision, one has to consider :
(A) Contribution
(B) Identifiable fixed cost, if any
(C) Impact of shutdown on other products, if any
(D) All of the above
Which of the following factors are not qualitative factors in a make or buy decision ?
(A) Doubt as to the ability of the subcontractor to meet delivery dates
(B) Doubt as to ability of the subcontractor to maintain quality
(C) The case with which improvements can be made to the product
(D) The effect of redundancy on labour relations
Which of the following is not a relevant cost information in a make or buy decision ?
(A) Variable cost of making
(B) General fixed cost
(C) Purchase price
(D) Loss of contribution to make the product
Selling a product at a price equivalent to or below marginal cost is recommended for a short period in certain special circumstances, such as :
(A) Introducing a new product
(B) Exploring foreign market
(C) Driving out a weaker competitor
(D) All of the above
Break-even analysis assumes that over the relevant range :
(A) Total costs are unchanged
(B) Unit variable costs are unchanged
(C) Variable costs are non-linear
(D) Unit fixed costs are unchanged
With regard to break –even charts and break-even analysis, which of the following is true ?
(A) It is assumed that variable cost fluctuates in direct proportion to output
(B) The break the break-even point is at the intersection of the sales line and the variable cost line
(C) A break-even chart shown the maximum profit possible
(D) A break-even chart is capable of dealing with any change of product mix
Which of the following is not an assumption underlying the accountant‘s break-even chart ?
(A) Fixed costs remain fixed throughout the range charted
(B) Selling prices do not change
(C) Variable costs fluctuate inversely with volume
(D) Unit variable costs remain constant throughout the range charted