(a) Gross total of all types of physical capital assets
(b) a Gross total of all capital assets minus wear and tear
(c) Stock of plant, machines, and equipment
(d) None of these
Answer: (b)
Explanation: In economics, investment is the purchase of goods to create wealth. It is a kind of goods that one purchases with the objective of getting returns from it in the future. In business, it will be considered as capital but due to wear and tear, the value depreciates. So the investment will be equal to the gross total of capital assets minus wear and tear.
Q62. In Economics, Production means-
(a) Manufacturing
(b) Making
(c) Creating utility
(d) Forming
Answer: (c)
Explanation: In economics, production means creating utility. Utility Means Satisfaction. Generated by consuming any unit of production.
Q63. Transfer earning or alternative cost is otherwise known as-
(a) Variable cost
(b) Implicit cost
(c) Explicit cost
(d) Opportunity cost (economic cost)
Answer: (d)
Explanation: Opportunity cost is cost measured for the value of the best next alternative that is not chosen. In other words, the opportunity cost is sacrificed value due to choosing a second-best alternative.
Q64. The average Fixed Cost Curve is-
(a) Upward sloping
(b) ‘U’ shaped
(c) ‘V’ shaped
(d) Downward sloping
Answer: (d)
Explanation: Average fixed cost is total fixed cost divided by total unit or in other words per-unit fixed cost. An increase in production leads to division or spread of fixed cost so average fixed cost decreases. The average fixed cost is the downward sloping curve.
Q65. If the average total cost is Rs. 1700, the total fixed cost is Rs. 52500, and the quantity produced is 75 units, find the average variable costs of the firm?
(a) Rs. 1000
(b) Rs. 2400
(c) Rs. 1800
(d) Rs. 600
Answer: (a)
Explanation: Total cost = (Average cost + Fixed cost) × quantity Practiced by following above formula, the answer realized is Rs. 1000.
Q66. Explicit + Implicit cost =
(a) Economic cost
(b) Social cost
(c) Personal cost
(d) Accounting cost
Answer: (a)
Explanation: Economic cost is revenue foregone during the production it can be expressed with the payment made in cash and opportunity cost occurred. So
Explanation: Total fixed curve is a graphical representation of the relation between total fixed cost and quantity produced. It is a horizontal curve because it remains fixed throughout the production.
Q68. Average Revenue means-
(a) The revenue per unit of the commodity sold
(b) The revenue from all commodities sold
(c) The profit realized all commodities unit sold
(d) The profit realized by the sale of all commodities
Answer: (a)
Explanation: Average revenue is the revenue realized per unit. In other words, total revenue realized divided by total units produced.
Q69. Gross profit means-
(a) Total investment over total saving
(b) Changes in methods of production
(c) Changes in the form of business organization
(d) Total receipts over total expenditure
Answer: (d)
Explanation: Gross Profit means profit realized in production. In Other words, gross profit is total revenue realized by selling of products and then reducing total cost with deduction of total cost i.e. expenditure occurred.
Q70. Which of the following most closely approximates our definition of oligopoly?
(a) The cigarette industry
(b) The barbershops
(c) The gasoline stations
(d) Wheat Farmers
Answer: (a)
Explanation: The closest approximate definition of oligopoly is the cigarette industry. An oligopoly market is a market where there is a very less number of sellers selling homogeneous products but with little differentiation to have an edge over competitors. Competition filter down to advertisement and marketing because the product is so much related.
