CMA Foundation MCQ Quiz Economics Lesson 1.4April 9, 2026 Maven Leave a Comment Welcome to the CMA Foundation MCQ Quiz Economics Lesson 1.4 quiz! Name Email 1. The law of variable proportions operates in: Long run only Short run only Both short run and long run Neither short run nor long run None 2. The law of variable proportions was developed by: Adam Smith J.M. Keynes H.H. Gossen Alfred Marshall None 3. Which of the following is a fixed factor in the short run? Labour Raw materials Land and building Fuel and power None 4. Average product is calculated as: TP × L TP ÷ L ΔTP ÷ ΔL TP + L None 5. Marginal product is the: Additional output from one more unit of variable factor Total output divided by number of units of labour Average output per unit of fixed factor Total output multiplied by number of units of labour None 6. When total product is at its maximum, marginal product is: Maximum Minimum Zero Negative None 7. The marginal product curve cuts the average product curve when: MP is at its maximum AP is at its maximum TP is at its maximum AP is at its minimum None 8. A rational producer always operates in: Any stage depending on price Stage III of law of variable proportions Stage I of law of variable proportions Stage II of law of variable proportions None 9. In Stage III of the law of variable proportions: TP falls, MP is negative TP increases, MP is increasing TP is maximum, MP is zero TP increases, MP is positive None 10. The law of variable proportions is also called: Law of returns to scale Law of diminishing marginal returns Law of constant returns Law of increasing returns None 11. In the law of returns to scale, when inputs are doubled and output more than doubles, it is called: Constant returns to scale Diminishing returns to scale Negative returns to scale Increasing returns to scale None 12. Which of the following is a cause of increasing returns to scale? Management diseconomies Lack of coordination Specialisation and division of labour Rise in input prices None 13. Constant returns to scale occurs when: Output increases in the same proportion as inputs Output increases more than proportionately to inputs Output increases less than proportionately to inputs Output decreases when inputs increase None 14. Which of the following best distinguishes law of variable proportions from law of returns to scale? Variable proportions applies in long run; returns to scale in short run Variable proportions changes all factors; returns to scale changes only variable factors Variable proportions changes only variable factors; returns to scale changes all factors proportionately Both laws are identical in their application None 15. In the law of returns to scale, the factor ratio: Changes as inputs increase Increases as inputs increase Decreases as inputs increase Remains the same as inputs increase None Time's upRelated Posts:CMA Foundation MCQ Quiz Economics Lesson 1.2CMA Foundation MCQ Quiz Economics Lesson 1.1CMA Foundation MCQ Quiz Economics Lesson 1.3 - Part 1CMA Foundation MCQ Quiz Economics Lesson 1.3 – Part 2
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