All India Management Association (AIMA) 2007 M.B.A Marketing Management Business Economics – I - Question Paper
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(d) 35 units
(e) 40 units. (2marks)
23.Which of the subsequent statements is false?
(a) avg. product cannot be zero
(b) avg. product will always be greater than marginal product
(c) Marginal product can be negative
(d) For the 1st unit of variable input, the marginal product is the identical as total product
(e) Marginal product increases only when the total product is increasing at an increasing rate. (1 mark)
24.The shape of Isocost line is
(a) Convex to origin
(b) Concave to origin
(c) U-shaped
(d) Downward sloping straight line from left to right
(e) L-shaped. (1 mark)
25.The total product reaches maximum, when
(a) Marginal Product = avg. Product
(b) avg. Product = Zero
(c) Marginal Product = Zero
(d) Marginal Cost = avg. Cost
(e) Marginal Revenue = Marginal Cost. (1 mark)
26.The shape of marginal product curve is
(a) Inverted U-shape
(b) U-shape
(c) Vertical straight line
(d) Horizontal straight line
(e) Downward sloping straight line. (1 mark)
27.Expansion path is the locus of different points where the firm’s expenditure
(a) Increases without any change in the price of inputs
(b) Increases with a few change in the price of inputs
(c) Increases with change in the price of outputs
(d) reduces without any change in the price of inputs
(e) reduces with change in the price of inputs. (1 mark)
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28.Hifi Inc. produces innovative interior decorating products that it sells to film studios, corporate offices
etc. The marginal product function of Hifi Inc. is
MPL = 0.5LK0.5
where, L = units of labor and K = units of capital
Hifi Inc. has employed 36 units of capital. If the market wage rate is Rs.120, interest is Rs.20 and price
of the good is Rs.2. The number of units of labor to be employed by Hifi Inc. is
(a) 10 units
(b) 20 units
(c) 30 units
(d) 40 units
(e) 120 units. (2marks)
29.Production function for a firm is Q = 200L – 0.2L2. If five units of labor are used, avg. productivity of
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