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Chapter 11
Theory of Costs
Multiple Choice Questions
āĻāĻাāϧিāĻ āĻŦিāĻāϞ্āĻĒ āĻĒ্ā§°āĻļ্āύ
1. A firm dumping untreated waste into the air imposes a
āĻ
āĻļোāϧিāϤ āĻā§ąā§°্āĻāύা āĻŦāϤাāĻšāϤ āĻĒেāϞাāĻ āĻĻিāϝ়া āĻĢাā§°্āĻŽে āĻāĻা āĻā§°োāĻĒ āĻā§°ে ।
(a) Private cost
āĻŦ্āϝāĻ্āϤিāĻāϤ āĻŦ্āϝāϝ়
(b) Social cost
āϏাāĻŽাāĻিāĻ āĻŦ্āϝāϝ়
(c) Sunk cost
āĻĄুāĻŦ āϝোā§ąা āĻŦ্āϝāϝ়
(d) Zero cost
āĻļূāύ্āϝ āĻŦ্āϝāϝ়
Answer: (b) Social cost (āϏাāĻŽাāĻিāĻ āĻŦ্āϝāϝ়)।
2. The concept of opportunity cost is associated with
āϏুāϝোāĻ āĻŦ্āϝāϝ়ā§° āϧাā§°āĻŖাāĻো āĻāϝ়াā§° āϏৈāϤে āϏāĻŽ্āĻĒā§°্āĻিāϤ
(a) Marshall
āĻŽাā§°্āĻļ্āĻŦেāϞ
(b) Senior
āĻ্āϝেāώ্āĻ
(c) Knight
āύাāĻāĻ
(d) Hanson
āĻšেāύāĻāύ
Answer: (c) Knight (āύাāĻāĻ)।
3. AFC curve is a
āĻ.āĻāĻĢ.āĻি. āĻŦāĻ্ā§° āĻšৈāĻে āĻāĻা
(a) U-shaped curve
āĻāĻ-āĻāĻৃāϤিā§° āĻŦāĻ্ā§°
(b) Negatively sloping curve
āĻāĻŖাāϤ্āĻŽāĻāĻাā§ąে āĻšেāϞāύীāϝ়া āĻŦāĻ্ā§°
(c) Positively sloping curve
āϧāύাāϤ্āĻŽāĻāĻাā§ąে āĻšেāϞāύীāϝ়া āĻŦāĻ্ā§°
Answer: (b) Negatively sloping curve (āĻāĻŖাāϤ্āĻŽāĻāĻাā§ąে āĻšেāϞāύীāϝ়া āĻŦāĻ্ā§°)।
4. AVC curve is a
āĻāĻিāĻি āĻŦāĻ্ā§° āĻšৈāĻে āĻāĻা
(a) Falling curve
āĻĒā§°ি āĻĨāĻা āĻŦāĻ্ā§°
(b) Rising curve
āĻāĻĻীāϝ়āĻŽাāύ āĻŦāĻ্ā§°
(c) U-shaped curve
āĻāĻ-āĻāĻৃāϤিā§° āĻŦāĻ্ā§°
Answer: (c) U-shaped curve (āĻāĻ-āĻāĻৃāϤিā§° āĻŦāĻ্ā§°)।
5. MC is
āĻāĻŽāĻি āĻšৈāĻে
(a) Independent of fixed costs
āϏ্āĻĨিā§° āĻŦ্āϝāϝ়ā§° āĻĒā§°া āϏ্āĻŦāϤāύ্āϤ্ā§°
(b) Dependent upon fixed costs
āϏ্āĻĨিā§° āĻŦ্āϝāϝ়ā§° āĻāĻĒā§°āϤ āύিā§°্āĻā§°āĻļীāϞ
(c) Neither of the two.
āĻĻুāϝ়োāĻাā§° āĻোāύোāĻোā§ąেāĻ āύāĻšāϝ়।
Answer: (a) Independent of fixed costs (āϏ্āĻĨিā§° āĻŦ্āϝāϝ়ā§° āĻĒā§°া āϏ্āĻŦāϤāύ্āϤ্ā§°)।
6. SAC curve is called
āĻāĻāĻāĻি āĻŦāĻ্ā§°āĻ āĻোā§ąা āĻšāϝ়
(a) Envelop curve
āĻā§ąā§°ি āĻĨāĻা āĻŦāĻ্ā§°
(b) Plant curve
āĻāĻĻ্āĻিāĻĻā§° āĻŦāĻ্ā§°
(c) Neither of the two
āĻĻুāϝ়োāĻাā§° āĻোāύোāĻোā§ąেāĻ āύāĻšāϝ়
Answer: (b) Plant curve (āĻāĻĻ্āĻিāĻĻā§° āĻŦāĻ্ā§°)।
7. When AC is minimum, then
āϝেāϤিāϝ়া āĻāĻি āύিāĻŽ্āύāϤāĻŽ āĻšāϝ়, āϤেāϤিāϝ়া
(a) AC<MC
āĻāĻি<āĻāĻŽāĻি
(b) AC>MC
āĻāĻি>āĻāĻŽāĻি
(c) AC=MC
āĻāĻি=āĻāĻŽāĻি
(d) None of these.
āĻāĻāĻŦোā§°ā§° āĻāĻো āύāĻšāϝ়।
Answer: (c) AC=MC (āĻāĻি=āĻāĻŽāĻি)।
8. Internal economics are available to
āĻāĻ্āϝāύ্āϤ⧰ীāĻŖ āĻ
ā§°্āĻĨāύীāϤি āĻāĻĒāϞāĻŦ্āϧ
(a) Particular firm
āύিā§°্āĻĻিāώ্āĻ āĻĢাā§°্āĻŽ
(b) All the firms
āϏāĻāϞো āĻĢাā§°্āĻŽ
Answer: (a) Particular firm (āύিā§°্āĻĻিāώ্āĻ āĻĢাā§°্āĻŽ)।
9. The envelop curve is the curve related to
āĻā§ąā§°āĻŖ āĻŦāĻ্ā§° āĻšৈāĻে āĻāϝ়াā§° āϏৈāϤে āϏāĻŽ্āĻĒā§°্āĻিāϤ āĻŦāĻ্ā§°
(a) LAC
āĻš্ā§°āĻĻ
(b) SAC
āĻŦেāĻ
(c) SMC
āĻāĻāĻāĻŽāĻি
(d) AVC
āώ্āĻ্ā§°োāĻ
Answer: (a) LAC (āĻš্ā§°āĻĻ)।
Very Short Answer Type Questions
āĻ
āϤি āĻāĻŽু āĻāϤ্āϤ⧰ āĻĒ্ā§°āĻাā§°ā§° āĻĒ্ā§°āĻļ্āύ
1. What is real cost ?
āĻĒ্ā§°āĻৃāϤ āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
Answer:
2. Define opportunity cost.
āϏুāϝোāĻāĻŦ্āϝāϝ় āύিā§°্āϧাā§°āĻŖ āĻā§°া।
Answer:
3. What is meant by money cost ?
āĻāĻা āĻā§°āĻ ā§° āĻ
ā§°্āĻĨ āĻি?
Answer:
4. What is social cost?
āϏাāĻŽাāĻিāĻ āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
Answer:
5. Define private cost.
āĻŦ্āϝāĻ্āϤিāĻāϤ āĻŦ্āϝāϝ় āύিā§°্āϧাā§°āĻŖ āĻā§°া।
Answer:
6. What is average fixed cost (AFC) ?
āĻāĻĄ় āϏ্āĻĨিā§° āĻŦ্āϝāϝ় (āĻ.āĻāĻĢ.āĻি.) āĻিāĻŽাāύ?
Answer:
7. Give the meaning of average variable cost (AVC).
āĻāĻĄ় āĻĒā§°িā§ąā§°্āϤāύāĻļীāϞ āĻŦ্āϝāϝ়ā§° (āĻāĻিāĻি) āĻ
ā§°্āĻĨ āĻĻিāϝ়া।
Answer:
8. What is average cost (AC).
āĻāĻĄ় āĻŦ্āϝāϝ় āĻিāĻŽাāύ (āĻāĻি)।
Answer:
9. Define marginal cost (MC).
āĻĒ্ā§°াāύ্āϤিāĻ āĻŦ্āϝāϝ় (āĻāĻŽāĻি) āύিā§°্āϧাā§°āĻŖ āĻā§°া।
Answer:
10. As soon as MC starts rising, AVC also starts rising. Is this statement true or false ?
āĻāĻŽāĻি āĻāĻ িāĻŦāϞৈ āĻā§°āĻŽ্āĻ āĻā§°াā§° āϞāĻে āϞāĻে, āĻāĻিāĻিāĻ āĻāĻ িāĻŦāϞৈ āĻā§°āĻŽ্āĻ āĻā§°ে। āĻāĻ āĻŽāύ্āϤāĻŦ্āϝāĻো āϏঁāĻা āύে āĻŽিāĻা?
Answer:
11. AFC curve is a rectangular hyperbola. What is the reason behind it?
āĻ.āĻāĻĢ.āĻি. āĻŦāĻ্ā§° āĻšৈāĻে āĻāĻ āĻāϝ়āϤাāĻাā§° āĻšাāĻāĻĒাā§°āĻŦোāϞা। āĻāϝ়াā§° āĻঁā§°ā§° āĻাā§°āĻŖ āĻি?
Answer:
12. TFC (Total Fixed Cost) = . + TC (Total Cost).
āĻিāĻāĻĢāĻি (āĻŽুāĻ āϏ্āĻĨিā§° āĻŦ্āϝāϝ়) = । + āĻিāĻি (āĻŽুāĻ āĻŦ্āϝāϝ়)।
Answer:
13. Define economies of scale.
āϏ্āĻেāϞ⧰ āĻ
ā§°্āĻĨāύীāϤি āύিā§°্āϧাā§°āĻŖ āĻā§°া।
Answer:
14. What are internal economies?
āĻāĻ্āϝāύ্āϤ⧰ীāĻŖ āĻ
ā§°্āĻĨāύীāϤিāĻŦোā§° āĻি?
Answer:
15. Define diseconomies of scale.
āϏ্āĻেāϞ⧰ āĻ
āĻ
ā§°্āĻĨāύীāϤি āύিā§°্āϧাā§°āĻŖ āĻā§°া।
Answer:
Short Answer Type Questions
āĻāĻŽু āĻāϤ্āϤ⧰āĻĒ্ā§°āĻাā§°ā§° āĻĒ্ā§°āĻļ্āύ
1. What are money costs and costs ?
āϧāύ⧰ āĻŦ্āϝāϝ় āĻā§°ু āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
2. What are explicit and implicit costs?
āϏ্āĻĒāώ্āĻ āĻā§°ু āĻ
āύ্āϤ⧰্āύিāĻšিāϤ āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
3. What are private and social costs?
āĻŦ্āϝāĻ্āϤিāĻāϤ āĻā§°ু āϏাāĻŽাāĻিāĻ āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
4. What are sunk and incremental costs ?
āĻি āĻĄুāĻŦ āĻৈāĻে āĻā§°ু āĻŦā§°্āϧিāϤ āĻŦ্āϝāϝ়?
Answer:
5. What are fixed and variable costs ?
āϏ্āĻĨিā§° āĻā§°ু āĻĒā§°িā§ąā§°্āϤāύāĻļীāϞ āĻŦ্āϝāϝ় āĻি?
6. What are some of the implicit costs incurred by an entrepreneur in running his or her firm?
āĻāĻāύ āĻāĻĻ্āϝোāĻীāϝ়ে āϤেāĻঁā§° āĻĢাā§°্āĻŽ āĻāϞাāĻŦāϞৈ āĻā§°া āĻিāĻুāĻŽাāύ āĻ
āύ্āϤ⧰্āύিāĻšিāϤ āĻŦ্āϝāϝ় āĻিāĻŽাāύ?
Answer:
7. Distinguish between AC and MC.
āĻāĻি āĻā§°ু āĻāĻŽāĻিā§° āĻŽাāĻāϤ āĻĒাā§°্āĻĨāĻ্āϝ āĻā§°া।
8. What is the relationship between AC and MC.
āĻāĻি āĻā§°ু āĻāĻŽāĻিā§° āĻŽাāĻā§° āϏāĻŽ্āĻĒā§°্āĻ āĻি।
Answer:
9. What is the shape of long run average cost curve?
āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻāĻĄ় āĻŦ্āϝāϝ় āĻŦāĻ্ā§°ā§° āĻāĻৃāϤি āĻি?
10. What are the reasons for U-shapedness of the LAC curve ?
āĻāϞ.āĻ.āĻি. āĻŦāĻ্ā§°ā§° āĻāĻ-āĻāĻৃāϤিā§° āĻাā§°āĻŖāĻŦোā§° āĻি?
11. Write short notes on the
(a) Internal economies
(b) External economies
(c) Diseconomies of scale.
(āĻ) āĻāĻ্āϝāύ্āϤ⧰ীāĻŖ āĻ
ā§°্āĻĨāύীāϤিā§° āĻāĻĒā§°āϤ āĻāĻŽু āĻোāĻা āϞিāĻāĻ (āĻ) āĻŦাāĻš্āϝিāĻ āĻ
ā§°্āĻĨāύীāϤি (āĻ) āϏ্āĻেāϞ⧰ āĻ
āĻ
ā§°্āĻĨāύীāϤি।
Long Answer Type Questions
āĻĻীāĻāϞীāϝ়া āĻāϤ্āϤ⧰āĻĒ্ā§°āĻাā§°ā§° āĻĒ্ā§°āĻļ্āύ
1. Explain the concepts of AFC, AVC, AC and MC.
āĻ.āĻāĻĢ.āĻি., āĻ.āĻি.āĻি., āĻ.āĻি. āĻā§°ু āĻāĻŽ.āĻি.-ā§° āϧাā§°āĻŖাāĻŦোā§° āĻŦā§°্āĻŖāύা āĻā§°া।
2. Explain clearly the shape of short run AC curve.
āĻুāĻি ā§°াāĻŖ āĻāĻি āĻŦāĻ্ā§°ā§° āĻāĻৃāϤি āϏ্āĻĒāώ্āĻāĻৈ āĻŦā§°্āĻŖāύা āĻā§°া।
3. How can you derive the AC curve ?
āĻāĻĒুāύি āĻāĻি āĻŦāĻ্ā§° āĻেāύেāĻĻā§°ে āĻāĻšā§°āĻŖ āĻā§°িāĻŦ āĻĒাā§°ে?
4. Explain clearly the relationship between AC and MC.
āĻāĻি āĻā§°ু āĻāĻŽāĻিā§° āĻŽাāĻā§° āϏāĻŽ্āĻĒā§°্āĻ āϏ্āĻĒāώ্āĻāĻাā§ąে āĻŦā§°্āĻŖāύা āĻā§°া।
5. Explain clearly the concept of long run average cost (LAC) curve.
āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻāĻĄ় āĻŦ্āϝāϝ় (āĻāϞ.āĻ.āĻি.) āĻŦāĻ্ā§°ā§° āϧাā§°āĻŖাāĻো āϏ্āĻĒāώ্āĻāĻাā§ąে āĻŦā§°্āĻŖāύা āĻā§°া।
6. Distinguish between plant curve and envelop curve.
āĻāĻĻ্āĻিāĻĻā§° āĻŦāĻ্ā§° āĻā§°ু āĻā§ąā§°āĻŖ āĻŦāĻ্ā§°ā§° āĻŽাāĻāϤ āĻĒাā§°্āĻĨāĻ্āϝ āĻā§°া।
7. Explain the economies and diseconomies of scale.
āϏ্āĻেāϞ⧰ āĻ
ā§°্āĻĨāύীāϤি āĻā§°ু āĻ
āĻ
ā§°্āĻĨāύীāϤিāĻŦ্āϝাāĻ্āϝা āĻā§°া।
8. What are the modern views related to long run cost ?
āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻŦ্āϝāϝ়ā§° āϏৈāϤে āϏāĻŽ্āĻĒā§°্āĻিāϤ āĻāϧুāύিāĻ āĻĻৃāώ্āĻিāĻংāĻীāĻŦোā§° āĻি?
Answer:
Very Long Answer Type Questions
āĻ
āϤি āĻĻীāĻāϞীāϝ়া āĻāϤ্āϤ⧰ āĻĒ্ā§°āĻাā§°ā§° āĻĒ্ā§°āĻļ্āύ
1. Explain the different concepts related to costs.
āĻŦ্āϝāϝ়āϏāĻŽ্āĻĒā§°্āĻীāϝ় āĻŦিāĻিāύ্āύ āϧাā§°āĻŖাāĻŦোā§° āĻŦā§°্āĻŖāύা āĻā§°া।
2. Discuss the derivation of AFC, AVC, AC and MC.
āĻ.āĻāĻĢ.āĻি., āĻ.āĻি.āĻি., āĻ.āĻি. āĻā§°ু āĻāĻŽ.āĻি.-ā§° āĻāĻĻ্āĻā§ą āϏāĻŽ্āĻĒā§°্āĻে āĻāϞোāĻāύা āĻā§°া।
3. Explain clearly the shape of LAC (or LMC) curve.
āĻāϞ.āĻ.āĻি. (āĻŦা āĻāϞ.āĻāĻŽ.āĻি.) āĻŦāĻ্ā§°ā§° āĻāĻৃāϤি āϏ্āĻĒāώ্āĻāĻাā§ąে āĻŦā§°্āĻŖāύা āĻā§°া।
4. What are economies of scale ? How do external economies and diseconomies of scale affect the firm's long run marginal cost curve ? Explain.
āϏ্āĻেāϞ⧰ āĻ
ā§°্āĻĨāύীāϤি āĻŦোā§° āĻি? āĻŦাāĻš্āϝিāĻ āĻ
ā§°্āĻĨāύীāϤি āĻā§°ু āϏ্āĻেāϞ⧰ āĻ
āĻ
ā§°্āĻĨāύীāϤিāϝ়ে āĻĒ্ā§°āϤিāώ্āĻ াāύāĻোā§° āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻĒ্ā§°াāύ্āϤিāĻ āĻŦ্āϝāϝ় āĻŦāĻ্ā§°āĻ āĻেāύেāĻĻā§°ে āĻĒ্ā§°āĻাā§ąিāϤ āĻā§°ে? āĻŦ্āϝাāĻ্āϝা āĻā§°া।
5. Discuss the nature of the short-run and long-run average cost curves. Why is the long-run cost curve flatter than the short run cost curve ?
āĻāĻŽ āϏāĻŽāϝ়ā§° āĻŦাāĻŦে āĻā§°ু āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻāĻĄ় āĻŦ্āϝāϝ় āĻŦāĻ্ā§°ā§° āĻĒ্ā§°āĻৃāϤি āĻāϞোāĻāύা āĻā§°āĻ। āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻŦ্āϝāϝ় āĻŦāĻ্ā§°āĻো āĻāĻŽ āϏāĻŽāϝ়ā§° āĻŦ্āϝāϝ় āĻŦāĻ্ā§°āϤāĻৈ āĻিāϝ় āϤোāώাāĻŽোāĻĻ āĻā§°ে?
6. Discuss the relationship between short run and long run average cost curves. How would you derive the long run MC (marginal cost) curve ?
āĻāĻŽু āϏāĻŽāϝ় āĻā§°ু āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻāĻĄ় āĻŦ্āϝāϝ় āĻŦāĻ্ā§°ā§° āĻŽাāĻā§° āϏāĻŽ্āĻĒā§°্āĻ āĻāϞোāĻāύা āĻā§°āĻ। āĻāĻĒুāύি āĻĻীā§°্āĻāĻŽ্āϝাāĻĻী āĻāĻŽāĻি (āĻĒ্ā§°াāύ্āϤিāĻ āĻŦ্āϝāϝ়) āĻŦāĻ্ā§° āĻেāύেāĻĻā§°ে āĻāĻšā§°āĻŖ āĻā§°িāĻŦ?
7. Distinguish between Economies and Diseconomies of scale.
āĻ
ā§°্āĻĨāύীāϤি āĻā§°ু āϏ্āĻেāϞ⧰ āĻ
āĻ
ā§°্āĻĨāύীāϤিā§° āĻŽাāĻāϤ āĻĒাā§°্āĻĨāĻ্āϝ।
8. Fill in the blanks in the paragraph below to give a good explanation of average and marginal costs in the short run. The words you need are given below :
āĻāĻŽ āϏāĻŽāϝ়ā§° āĻŦাāĻŦে āĻāĻĄ় āĻā§°ু āĻĒ্ā§°াāύ্āϤিāĻ āĻŦ্āϝāϝ়ā§° āĻাāϞ āĻŦ্āϝাāĻ্āϝা āĻĻিāĻŦāϞৈ āϤāϞ⧰ āĻĒেā§°াāĻ্ā§°াāĻĢāϤ āĻĨāĻা āĻাāϞী āĻ াāĻāĻŦোā§° āĻĒূā§°āĻŖ āĻā§°া। āĻāĻĒোāύাāĻ āĻĒ্ā§°āϝ়োāĻāύ āĻšোā§ąা āĻļāĻŦ্āĻĻāĻŦোā§° āϤāϞāϤ āĻĻিāϝ়া āĻšৈāĻে:
rise, per unit, increasing returns, total cost, fall, diminishing returns, rise, U, marginal.
The marginal cost is the change in the ........ as the level of output changes. The average cost, however, is the cost ........ of total output. As output increases, marginal cost will at first tend to ........ as there will be increasing returns to the variable factor. When diminishing returns set in the marginal cost will then ........ The average ost curve will show a similar pattern. Initially the level of average cost will ............. but diminishing returns will then make it ........ followed by ........ Therefore make both the average and ............. cost curves.............
9. What is the shape of LAC and LMC according to the modern approach?
āĻāϧুāύিāĻ āĻĒāĻĻ্āϧāϤি āĻ
āύুāϏ⧰ি āĻāϞāĻāĻি āĻā§°ু āĻāϞāĻāĻŽāĻিā§° āĻāĻৃāϤি āĻি?
Answer: