Multiple Choice Questions

MCQ.- Objectives

ECON365
Farm Management, Production & Resource
Economics.

1. an application of the accounting principles to the business of farming:

A. Farm planning B. Farm budgeting

C. Farm accounting D. Marketing

2. Beef' and 'hides' are examples of:

A. Independent enterprise B. Joint enterprise

C. Supplementary enterprise D. Competitive enterprise

3. Which of the following is not correctly matched?

App rises continuously till APP and MPP rises continuously - Till MPP is
A. MPP is both equal. B. more than APP

APP & MPP both fall but TPP rises.

TPP rises continuously - Till MPP is
C. D. When MPP is less than APP but more
not equal to Zero
than zero

4. Which one of the following pairs is not correctly matched?

Elasticity of production = Stage III of Negative marginal product = Stge

A. classical production function greater B.
III of classical production function
than unity

Negative elasticity of production = Average product decreases but is

C. Stage III of classical production D. greater than marginal product = Stage
function II of classical production function

5. A farmer having less than one hectare of irrigated the land, is known as:

Small farmers B. Marginal farmers

A.

C. Big farmers D. None of the above

6. A farmer, which has land holding between 1 to 2 hectare known as:

A. Marginal farmer B. Small farmer

C. Optimal farmer D. None of the above

7. A farmer which has land holding between zero to one hectare is known as:

A. Small farmers B. Big farmer

C. Marginal farmer D. Argicultural labour

8. A group of technical units are known as:

A. Farm firm B. Plant

C. Economic unit D. All above

9. A single convenient unit in production for which technical co-efficient are calculated is known as:

Units of accounting B. Technical units

A.

C. Marginal units D. None of the above

10. A statement, which shows the financial condition and stability of the business at a particular point
of time, is known as:

A. Net worth statement B. Business statement

C. Physical efficiency measures D. None of the above

11. The other name of overhed cost is:

Fixed cost B. Variable cost

A.

C. Total cost D. Marginal cost

12. A.P.P. Will be equal to (Y = output, X = input):

A. X/Y B. X/Y x 100

C. Y/X D. None of above

13. Above 15% farmers had land holding in between:

A. 2-4 ha B. 0-1 ha

C. 1-2 ha D. None of the above

14. Absence integration between resources and activities in the process of production is called:

Linearity B. Non-linearity
A.

C. Quasi-non-linearity D. Quasi-linearity

15 Iso-revenue line is a:

A. Straight line B. Curve line

C. Horizontal line D. Vertical Line

16. Average fixed cost is equal to:

A. Total fixed cost / 100 B. Total fixed cost/total variable cost

C. Total fixed cost/output D. Total fixed cost/Input

17. Average product is equal to marginal product when:

A. Average Product is maximum B. Average Product is minimum

C. Marginal Product is zero D. None of the above

18. Basic fundamental law of agriculture is:

A. Law of diminishing return B. Law of equimarginal return

C. Law of substitution D. Law of demand and supply

19 Building machinery and implements are examples of:

A. Variable resources B. Fixed resources

C. Flow resources D. None of the above

20 Which one of the following principles is employed in production when resources are scarce?

A. Added cost is equal to added returns B. Equal-marginal principle

C. Competitive advantage D. None of these

21. Which one of the following pairs is correctly matched?

A. Common cost = Cost associated with B. Average cost = A study of returns and
 variable resource costs

Marginal cost = Additional cost to

Prime cost = Cost related to fixed
C. produce an additional unit of D.
resources
output

22 Which one of the following is operational decision?

A. Enterprise mix B. Selection of least cost

C. Level of resource use D. All above

23. Co-operative farming, Collective farming, Capitalistic farming, State farming and Peasant farming
are:

A. Types of farming B. System of farming

C. Both these D. None of these

24. Which one of the following is not a system of farming?

A. Peasant farming B. Co-operative farming

C. Mixed farming D. Co-operative collective farming

25. Crop farming and milk production is an example of:

A. Competitive enterprise B. Complementary enterprise

C. Supplementary enterprise D. None of them

26. Dairy farming, poultry farming, crop farming and pig farming are:

A. Types of farming B. System of farming

C. Both (a) and (b) D. None of these

27. Decisions regarding irrigation, conservation and reclamation programmes are comes under:

A. Buying decisions B. Selling decisions

C. Marketing decisions D. Strategic decisions

28. Decisions regarding selection of enterprise are known as:

A. Marketing decisions B. Buying decisions

 C. Administrative decisions D. Operational decisions

29. Diversified farming is a kind of:

A. System of farming B. Type of farming

C. Both of the above D. None of the above

30. Which one of the following is not a physical factor affecting the type of farming?

A. Climate B. Topography

C. Soil D. Labour supply

31 Enterprise budgeting deals with input-output relationship of:

A. A set of different enterprises B. A single enterprises of the farm

C. Both of the above D. None of the above

32. Expenditure on fertilizers is called:

A. Fixed cost B. Variable cost

C. Marginal cost D. Total cost

33. Which one of the following formulae gives the correct measure of 'Rate of Capital turnover'?

(Gross income/Total farm assets)

A. x 100 (Net income / Total farm assets) x 100
B.

(Farm business income / Total farm (Capital investment / Total farm

D. assets) x 100
assets) x 100
C.
34. Fasts and findings of other science are coordinated for the solution of various problems of
individual farmers with view to achieving certain desired goals, hence, farm management is:

A. Micro Approach Science B. Practical Science

C. Integrating Science D. Broader Field

35. Farm management as a resource allocation proportion is related to:

 Inter-farm management B. Intra-farm management
A.

C. Both inter and intra farm management D. Inter-regional management

36. Farm management concern with obtaining the maximum yield per hectare and considers per unit
cost therefore it is:

A. Practical Science B. Integrating Science

C. Profitability Oriented D. Broader Field

37 Farm management deals with:

A. Judicious decisions B. Use of scarce resources

Profit maximization and family

C. satisfaction All of these
D.
38. Farm management is a practical science because of:

It is integrating facts and findings of

A. It is interested in profitability B.
other sciences

It deals with facts of other

physical sciences and testing the
C. D. All of these
applicability of those facts and
findings

39. Farm management treats every farm unit unique in available resources, problems and
potentialities because it has:

A. Broader Field B. Micro Approach

C. Practical D. None of these

40. Farm planning involves:

Selecting and adopting best package

A. Preparing farm budget in advance B.
of practices

C. Both of these D. None of these

41. Farming planning means:

A. Farm budgeting B. Cropping sequence

C. Types of enterprise D. None of these

42. Which one of the following economic principles helps a farmer to allocate his limited resources to
two different enterprises?
 A. The law of variable proportions B. The law of comparative advantage

The principles of fixed and variable

C. The law of equimarginal returns D.
costs

43. Which of the following statement is correct?

A. When average cost is decreasing, it is B. When average cost is decreasing, it is

more than marginal cost less than marginal cost

C. When average cost is increasing, it

is more than marginal cost D. None of the above

44. Gross return plus charge in inventory minus total cost is equal to:

A. Farm income B. Family income

C. Tax D. None of the above

45. How much farmers have land holding more than 10 hectares?

A. 15% B. 9%

C. 15% D. 4%

46. How much percent of total cost of production goes to labour investment?

A. 25-30% B. 46-50%

C. 40-45% D. 15-20%

47. How the field of farm management is broader?

A. It tests the applicability of facts and

findings B. It is interested in profitability

C. It gets information from more

than one discipline D. None of the above

48. If more and more capital and labour are applied to a fixed piece of land, the system of cultivation
or farming is known as:

A. Intensive cultivation B. Extensive cultivation

 C. Co-operative farming D. Large scale farming

49. If substitution ratio is equal to price ratio than cost will be:

A. Minimum B. Increasing

C. Maximum D. Decreasing

50. If subs titution ration is less than pri ce ratio than cost will be:

A. Increasing B. Maximum

C. Decreasing D. None of the above

51 If the members have not any right on land and connot take decisions regarding farming but
guided by a general body and profit is given according to the labour and capital invested by the
member is known as:

A. Co-operative joint farming B. Co-operative collective farming

C. Co-operative better farming D. Co-operative tenant farming

52. If the small holders form a society for farming and get profit after deducting the expenses of his
price of land and farmer also have right on his land the system is known as:

A. Co-operative better farming B. Co-operative collective farming

C. Co-operative joint farming D. None of these

53. In a complete farm planning due consideration is given to:

Relationship among different

A. Resource use and restrictive B.
enterprises

C. Goods managerial skill of the operator D. All of above

54. In a manufacturing industry generally applies law of:

A. Constant return B. Increasing return

C. Decreasing return D. All of the above

55. In capitalistic farming, the land is owned by:

A. Land lord B. Factory lord

 C. Both (a) and (b) D. Government

56. In classical production function when average product is increasing:

A. Marginal product is less than average B. Marginal product is equal to average

product product

C. Marginal product is greater than

average product D. None of the above

57. In classical production function, rational zone is always:

A. First zone B. Second zone

C. Third zone D. None of the above

58. In mixed farming the contribution of livestock to gross farm income is:

A. At least 10% B. At least 30%

C. At least 40% D. More than 50%

59. In peasant farming the owner of the land is:

A. Land lord B. Co-operative society

C. Government D. Farmer

60. In the short run, Average Cost, Average Variable Cost and Marginal Cost Curves are 'U' shaped
due to the operation of:

Substitution between two factor

A. Low of equimarginal returns B.
inputs

C. Law of variable proportion D. Time comparison principle

61. In which planning period profit rule says that gross return should cover variable cost:

A. Long run B. Short run

C. Both (a) and (b) D. None of the above

62. In which planning period we can change the output by altering the size of form:

A. Long run B. Short run

 C. Both (a) and (b) D. None of the above

63. In which planning period we can change the output without altering the size of the plant:

A. Long run B. Short run

C. Accounting period D. Base year period

64. In which relationship increase or decrease in the production of one product affects the production
of the other commodity inversely:

A. Joint product B. Supplementary

C. Complementary D. Competitive

65. Which of the following is not component of farm business?

A. Capital B. Environment

C. Land D. Management

66. Which of the following is not a type of farming on the basis of land use and cultural practices
classification?

A. Tenant farming B. Specialized farming

C. Diversified farming D. Mixed farming

67 Which of the following is not a farming system on the basis of ownership and management
classification?

A. Tenant farming B. Co-operative farming

C. Mixed farming D. State farming

68. Keeping few birds, some fruit trees and a small garden on farm are the:

A. Complementary enterprise B. Competitive enterprise

C. Supplementary enterprise D. None of these

69. Which of the following is not a component of farm business?

A. Land B. Capital

C. Labour and Management D. Water

70. Land holding of either 10 or more hectares have been classified as:
 A. Semi-medium B. Medium

C. Semi-large D. Large

71. Land reforms have been equated with total development:

A. Urban B. Agrarian

C. Industrial D. Education

72. Level of output of a particular commodity depends upon the quantities of inputs used for its
production. This relationship is known as:

A. Production process B. Product mix

C. Production function D. Cost function

73. The return from best alternate use of that input forgone by putting it to the present use is known
as:

A. Average cost B. Total cost

C. Marginal cost D. Opportunity cost

74. Which of the following is an economic factor, affects the type or system of farming?

A. Availability of capital B. Water

C. Land D. All of the above

75. Management decisions, which involve lasting effects, are known as:

A. Operational decisions B. Strategic decisions

C. Marketing problem decisions D. Administrative decisions

76. Marginal cost is equal to:

Change in total cost/change in

A. B. Change in total cost + 100
output

C. Average fixed cost D. None of the above

77. Morginal cost is equal to:

A. The average cost of the total output B. The difference between average cost
produced and the cost of the last unit produced
 C. The cost of the last but one unit D. The extra cost of an additional
produced unit produced

78. Marginal cost is the:

A. Change in cost due to one unit change B. Change in cost due to one unit
in input change in output

C. Change in variable cost due to one

unit change in input D. None of the above

79. Marginal farmers are those farmers having land holding:

A. Less than 5 acres B. Less than 2 acres

C. Less than 1 acre D. All of those

80. Marginal product is the:

A. Output per unit of input B. Total output divided by total input

Change in output due to one unit Change in input due to one unit
C. D.
change in input change in output

81. Maximum profit will be at the point where:

A. M.C. = M.R. B. M.C. is more than M.R.

C. M.C. is less than M.R. D. None of the above

82. Which are of the following is administrative decision?

A. Financing the farm business B. Accounting and book-keeping

Adjustments of government
C. programmes and policies All of these
D.
83. Mines and Fishes are subject to the law of:

A. Diminishing return B. Increasing return

C. Constant return D. None of the above

84. Net capital ration is equal to:

A. Total assets/Total liabilities B. Total liabilities/Total assets

C. Total assets/Current liabilities D. None of the above

85. When variable cost is zero, the total cost will be?

A. Equal to variable cost B. Equal to fixed cost

C. Equal to average variable cost D. None of the above

86. Opportunity cost is:

Cost of next best alternative

A. Cost of supplementary enterprise B.
foregone

C. Cost of cultivation D. Cost of production

87. Optimizing the use of farm resources on an individual farm level. It is a:

A. Farm management B. Production economics

C. Agricultural marketing D. Macro economics

88. Per hectare calculated cost is known as:

A. Cost of cultivation B. Cost of production

C. Cost of farming D. Total cost

89. Per Qunital calculated cost is known as:

A. Cost of cultivation B. Cost of production

C. Cost of farming D. None of the above

90. The relationship between cost function and production function is:

A. Positive B. Negative

C. Increase D. None of these

91. The resources, if their services are not used, these cannot be stocked are known as:

A. Stock resources B. Flow resources

C. Fixed resources D. All of the above

92. When total product is highest, marginal product will be?

 A. Minimum B. Maximum

C. Zero D. Increasing

93. When total cost is divided by total units of the production, we get?

A. Marginal cost B. Average cost

C. Fixed cost D. Variable cost

94. Selection and adoption of best packages of practices comes under:

A. Agricultural marketing B. Systems of farming

C. Types of farming D. Farm management

95. When marginal product is zero, the total product is?

A. Maximum B. Minimum

C. Zero D. None of the above

96. Specialized farming and diversified farming are:

A. Types of farming B. Systems of farming

C. Both (a) and (b) D. None of these

97. When land is owned by government and workers work as employees getting their wages
regularity, it is called?

A. Peasant farming B. Collective farming

C. Capitalistic farming D. State farming

98. When increase or decrease in the level of one product does not affect the production level of
another product, this relationship is known as?

A. Competitive B. Complementary

C. Supplementary D. Joint product

99. Success of a farm plan depends to a great extent, on the accuracy of basic date regarding:

Right production of crops and

A. Estimates of production from crops
B. livestock in relation to fodder and
animals
feed requirement

Availability of capital for investment in

C. a particular enterprise All of these
D.

100. When farmers pool their land, labour and capital and work jointly under the direction of an
elected managing committee and divide the profit among themselves in probortion of land
contributed and wages earned by each one of them it is called?

A. Co-operative farming B. Collective farming

C. Capitalist farming D. Peasant farming

101. The amount added to total cost for producing additional unit of output is known as:

A. Marginal cost B. Average cost

C. Total cost D. None of them

102. The assets that are difficult to convert into cash to meet any current obligations are:

A. Working assets B. Current assets

C. Fixed assets D. None of the above

103. Total output is maximum t the point when:

A. Average product is maximum B. Average product is zero

C. Marginal product is zero D. Marginal product is maximum

104. Total cost is equal to:

A. Fixed cost + Variable cost B. Fixed cost + Variable cost/100

C. Fixed cost - Variable cost D. None of the above

105. The cost incurred by a firm in purchasing any factor of production is referred to as:

A. Explicit cost B. Implicit cost

 C. Variable cost D. None of these

106. The cost of various operations from land preparation to threshing of the crop is known as:

A. Cost of cultivation B. Cost of farming

C. Both (a) and (b) D. None of the above

107. The cost which are not paid to others, are called:

A. Explicit cost B. Implicit cost

C. Both (a) and (b) D. None of these

108. The cost which is varying with the output is called:

A. Average variable cost B. Average fixed cost

C. Variable cost D. Fixed cost

109. The decisions about land resources and farming operations, questions like what to produce, how
to produce and how to equip the farm, are known as:

Production and organization

A. Administration problem decisions B.
problem decision

C. Buying decision D. Selling decision

110. The formula for rate of capital turn over is:

A. Gross Income/Total Farm Assests B. Net Income / Total Farm Assests x

x 100 100

C. Total Farm Assets / Net Farm Income

x 100 D. None of the above

111. The function of successful farm manager is:

Recognition and definition of a

A. Formation of the goals B.
problem

C. Decision making and taking action D. All of these

112. The total fixed cost curve:

A. Increase with the level of output B. Remains constant at all the output

C. Decreases as output increases D. Both (b) and (c)

113. The inflection point on total product curve corresponds to the:

 A. Maximum of marginal product curve B. Maximum of average product curve

Minimum of marginal product

C. Maximum of total product curve D.
curve

114. The large number of combination of two inputs which have some cost is known as:

A. Iso product B. Iso cost

C. Iso revenue D. Indifference curve

115. The law of diminishing returns applies more generally to:

A. Cloth Industry B. Chemical Industry

C. Agricultural Industry D. Film Industry

116. The law, which is very useful in determining the best use of limited resources, is:

A. Law of opportunity cost B. Law of diminishing return

C. Law of substitution D. None of the above

117. The most liquid assets are:

A. Fixed assets B. Working assets

C. Currents assets D. Liabilities

118. The physical property of a business along with their values at a specific date is enlisted in:

A. Farm book-keeping B. Farm planning

C. Farm inventory D. Farm management

119. The principle of equi-marginal return states that the profits will be the greatest if unit resources
are used where:

A. Marginal returns are the highest B. Average returns are the highest

C. Total returns are the highest D. Net returns are the highest

120. The process of transformation of certain resources of inputs is known as:

A. Product B. Production function

C. Production D. Consumption
121-------------- means a piece of land where crop and livestock enterprises are taken up under
common management and has specific boundaries.

a) Farm b) Field c) Estate d) Ranch

122. Farm Management is generally considered to be ---------------in its scope.

a) Macroeconomic b) Microeconomic c) Both d) None of these

123.is a type of farm that produces only enough food to feed the family.

a) Commercial farm b) Subsistence farm c) crop farm d) Dairy farm

124------------------------------- is an applied field of science, Wherein the principle of choice are

applied to use of capital,labour,land and management in farming industry.

a) Agricultural production economics b) Resource economics c) farm Management d)

Production economics.

125. What to Produce ? Is-----------------------problem

a) Factor-factor b) Product – product c) Factor- Product d) None

126. How to produce ? Is ---------------- Problem

a) Factor-factor b) Product – product c) Factor- Product d) None

127. How much to produce ? Is ---------------- Problem

a) Factor-factor b) Product – product c) Factor- Product d) None

128. Factors of production are land,labour,capital and --------------

a) Management b) Rainfall c) skill d) All of these.

129. Each successive unit add more to the output than the previous unit,it found in law of -
-

a) Constant return b) Increasing return c) Decreasing return d) Return to scale

130. In law of increasing return resulting production curve is --------------- to origin.

a) Convex b) Concave c) Straight line d) Parallel

131. Each successive unit adds less to the output than the previous unit, it found in law of--
-

a) Constant return b) Increasing return c) Decreasing return d) Return to scale

132. The shape of production curve is ----------------to origin.

a) Convex b) Concave c) Straight line d) Parallel

133. Linear production indicates -------------------

a) Constant return b) Increasing return c) Decreasing return d) Return to scale

134. In law of decreasing return resulting production curve is --------------- to origin.

a) Convex b) Concave c) Straight line d) Parallel

135------------------------relationship deals with production efficiency of the resources.

a) Factor-factor b) Product – product c) Factor- Product d) None

136. In stage1 of production function elasticity of production (Ep) is ---------------

a) Less than one b) Greater than one c)Is equal to one d) Zero

137. At the end of stage1 of production function elasticity of production (Ep) is --------------
-

a) Less than one b) Greater than one c)Is equal to one d) Zero

138. In stage 2 of production function elasticity of production (Ep) is ---------------

a) Less than one b) Greater than one c)Is equal to one d) Zero
139. At the end of stage 2 of production function elasticity of production (Ep) is -------------
--

a) Less than one b) Greater than one c)Is equal to one d) Is equal to Zero

140. In which zone Marginal Physical Product is more than average physical product.

a) stage 1 b) stage 2 c) stage 3 d) None

141 is the document that is used to keep account different activities, events and materials
etc regarding the farm operation.

a) Farm record b) Farm budget c) Farm planning d) None

142 are statements of money paid out or received for goods and services used in farming
business.

a) Farm record b) Farm budget c) Farm planning d) Farm account

143.Which of the following falls under physical farm record.

a) Sales register b) Machinery use record c) Stationary register d)Auction Register

145. Which of the following falls under farm financial record.

a) Sales register b) Farm inventory c) Stationary register d)Auction Register

146.Which of the following falls under supplementary farm record.

a) Sales register b) Both c & d c) Stationary register d)Auction Register

147.Production is function of ---------------

a) Factor b) Price c) Good d) Profit

148.The slope of -------------------- denotes the rate of substitution between two resources.

a) Isoquant b) Isoclines c) Ridge line d) expansion path

149--------------------- is not insurable

a) Uncertainty b) Risk c) Price d)None

150---------------- involves mathematical programming maodel.

a) Farm budgeting b) partial budgeting c) Linear programming d)Enterprise budgeting