Economics Practice Test – Theory of Production (Questions with Answers and Explanations)

The equilibrium point of a firm is at the point where the isoquant is ______ (JAMB 2012)

A. is greater than the isocost
B. less than the isocost
C. tangent to the isocost
D. greater than the output

If all factors are variable in the long run, firms will experience _____ (JAMB 2012)

A. decreasing returns to scale
B. increasing returns to scale
C. diminishing returns
D. economies of scale

One of the factors limiting the effectiveness of division of labour in the production process is the ______ (JAMB 2016)

A. prevailing wage rate
B. level of technology
C. unemployment rate
D. population size

From the table above, the average product of the 3^rd unit of labour is ______ (JAMB 2017)

Study the diagram below:

From the diagram above, the optimal point of production is ______ (JAMB 2011)