Producer Equilibrium Class 12 MCQ with Answers Economics are covered in this Article. Producer Equilibrium Class 12 MCQ Test contains 35 questions. These ICSE or ISC Microeconomics Class 12 MCQ have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Producer Equilibrium Class 12 MCQ with Answers (Multiple choice questions)
1. Profit is the difference between Total ___________ and Total __________ .
a) Revenue ; Cost
b) Profit ; Cost
c) Revenue ; Profit
d) Revenue ; Income
Answer
Answer: (a) Revenue ; Cost
2. Producer is in equilibrium when he produces the level of output at which his profits are _________.
a) Maximum
b) Minimum
c) High but not maximum
d) None of the above
Answer
Answer: (a) Maximum
3. When the producer earns maximum profit at a particular level of output, they have ____________ incentive to increase or decrease level of output.
a) Some
b) No
c) Great
d) All of the above
Answer
Answer: (b) No
4. When the level of output is Less than the level of output at Equilibrium, the profits of the producer are :-
a) Less than maximum profit
b) Maximum profit
c) Decline from maximum level of profits
d) None of the above
Answer
Answer: (a) Less than maximum profit
5. When the level of output is at Equilibrium, the profits of the producer are :-
a) Less than maximum profit
b) Maximum profit
c) Decline from maximum level of profits
d) None of the above
Answer
Answer: (b) Maximum profit
6. When the level of output is more than the level of output at Equilibrium, the profits of the producer :-
a) Less than maximum profit
b) Maximum profit
c) Decline from maximum level of profits
d) None of the above
Answer
Answer: (c) Decline from maximum level of profits
7. When using Total cost and Total revenue curves, profit is maximum when the vertical difference between Total Revenue and Total Cost curve is : –
a) Minimum
b) Near maximum
c) Maximum
d) None of the above
Answer
Answer: (c) Maximum
8) When does producer gets equilibrium when using total cost and total revenue curves : –
a) Vertical distance between Total cost and Total revenue curves is maximum.
b) Total cost and total revenue curves have same slope
c) Additional unit of output decreases profit.
d) All of the above
Answer
Answer: (d) All of the above
9. At the Break even point : –
a) Total Revenue = Total Cost
b) Average Revenue = Average Cost
c) Profits and Losses are equal to 0
d) All of the above
Answer
Answer: (d) All of the above
10. When does producer gets equilibrium when using marginal cost and marginal revenue curves : –
a) Marginal cost = Marginal revenue
b) Slope of Marginal Cost > Slope of Marginal revenue , where Marginal cost = Marginal revenue
c) Both A and B
d) None of the above
Answer
Answer: (c) Both A and B
Producer Equilibrium Class 12 MCQ with Answers (Multiple choice questions)
11.Which of the following statements defines equilibrium. ( Choose the correct alternative)
a) State of rest
b) Forces working in different directions are in balance
c) Both (a) and (b)
d) Tendency to move in either directions
Answer
Answer: C
12.A firm is in equilibrium when _______.( Fill in the blank with correct alternative).
a) The demand and cost are same
b) At level of output where profit is maximized
c) Both (a) and (b)
d) None of the above
Answer
Answer: B
13. Profits are defined as the difference between the Total revenue and total cost. (True/False)
Answer
Answer: TRUE
14. The profit is maximized when _______.( Fill in the blank with correct alternative)
a) Difference between total revenue and total cost is maximum
b)Difference between total revenue and total cost is minimum
c) There is no difference between total revenue and total cost
d) None of the above
Answer
Answer: A
15. Total profit depends upon ( Choose the correct alternative)
a) Revenue
b) Total revenue
c) Total cost
d) Both (b) and ( c)
Answer
Answer: D
16. Per unit profit depends upon total revenue and per unit cost.(True/False)
Answer
Answer: FALSE
17. Normal profit are defined as ____.( Fill in the blank with correct alternative)
a) Amount of profit that is high enough so that the firm is induced to remain in industry
b) Amount of profit that maximizes the cost
c) Amount of profit that minimise the cost
d) All of the above
Answer
Answer: A
18. The amount of profit which is low enough that new firms don’t want to enter in industry is called ( choose the correct alternative)
a) Total profit
b) Normal profit
c) Per unit profit
d) None of the above
Answer
Answer: B
19. Excess of revenue over cost is called pure profit (True/False)
Answer
Answer: TRUE
20. Normal profit are a part of ____.( Fill in the blank with correct alternative)
a) Cost of production
b) Total revenue
c) Both (a) and (b)
d) None of the above
Answer
Answer: A
Producer Equilibrium Class 12 MCQ with Answers (Multiple choice questions)
21. Pure profit is also known as ( Choose the correct alternative)
a) Normal profit
b) Super normal profit
c) Total profit
d) None of the above
Answer
Answer: B
22. If revenue is equals to firm then the firm earns______( Fill in the blank with correct alternative)
a) Pure profit
b) Total profit
c) Normal profit
d) Impure profit
Answer
Answer: C
23. Profit maximization rules are also called as ( choose the correct alternative)
a) Normal profit rules
b) Pure profit rules
c) Total profit rules
d) Rules of equilibrium of a firm
Answer
Answer: D
24. Why a firm continues to produce even when it is facing losses?( Choose the correct alternative)
a) Due to fixed cost
b) For profit maximization
c) To gain pure profit
d) All of the above
Answer
Answer: A
25. If the firm chooses the option of closing down, the loss would be equal to fixed cost (True/False)
Answer
Answer: TRUE
26. _______ is known as the situation when a firm stops producing output but retains the capital that would allow it to resume production later.( Fill in the blank with correct alternative)
a) Profit maximization
b) Closed economy
c) Shut down
d) None of the above
Answer
Answer: C
27. When a firm produce no output to minimise its loss, it is a situation of ( choose the correct alternative)
a) shut down
b) High production
c) Profit maximization
d) Both (a) and (b)
Answer
Answer: A
28. In the short run,a firm should produce only if; ( choose the correct alternative)
a) Average revenue ≥ Average cost
b) Average revenue ≥ Average variable cost
c) Total revenue ≤ Total variable cost
d) Total revenue ≤ Total cost
Answer
Answer: B
29. Profit maximizing output is the one which equates marginal revenue and marginal cost . (True/False)
Answer
Answer: TRUE
30. If marginal revenue exceeds marginal cost what would the firm do?
( Choose the correct alternative)
a) Produce more
b) Produce less
c) Selling its units
d) Purchasing new units
Answer
Answer: A
31. The firm can increase its profits by producing less in which of the following Situations.( Choose the correct alternative)
a) MC < MR
b) MC > MR
c) MC = MR
d) MC ≤ MR
Answer
Answer: B
32. If MC = MR , then ( choose the correct alternative)
a) It maximises the profit
b) It increases the production
c) It doesn’t pay the firm to produce either more or less
d) None of the above
Answer
Answer: C
33. For equality of marginal cost with marginal revenue to ensure profit maximization, it is sufficient that the marginal cost be less than marginal revenue at slightly lower output . (True/False).
Answer
Answer: TRUE
34. Marginal cost curve should intersect the marginal revenue curve from below so that ______. ( Fill in the blank with correct alternative)
a) Marginal cost is less than marginal revenue to the left of profit maximization output
b) Marginal cost is greater than marginal revenue to the right of the profit maximization output
c) Both (a) and (b)
d) None of the above
Answer
Answer: C
35. Which of the following conditions are necessary for profit maximization?( Choose the correct alternative)
a) Marginal cost should be equal to marginal revenue
b) Marginal curve should be positively sloped
c) Marginal cost should be greater than marginal revenue
d) Both (a) and (b)
Answer
Answer: D
Economics Class 12 ISC MCQs – Term 1
- Demand and Law of Demand MCQ Class 12
- Theory of Consumer Behaviour Class 12 MCQ
- Elasticity of Demand
- Supply – Law of Supply and Price Elasticity of Supply
- Market Mechanism
- Law of Returns
- Cost and Revenue Analysis
- Forms of Market
- Producer’s Equilibrium
- Determination of Equilibrium Price and Output under Perfect Competition