In the context of cost analysis, fixed costs in the short run: MCQ with Answer and Explanation

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In the context of cost analysis, fixed costs in the short run:

A. Vary with the level of output

B. Remain constant irrespective of the level of output

C. Are zero at zero output

D. Are always greater than variable costs

Answer: Option B

Solution (By JKSSB Mock Tests)

Fixed costs do not change with the level of output in the short run; they must be incurred even if output is zero.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Consumer Sovereignty' implies that:

A. Only exporters decide production

B. Government decides all production

C. Producers decide what to produce

D. Consumers ultimately determine what is produced through their demand

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Correct Answer: Option D

Explanation:
Consumer sovereignty means that in a market economy, consumers, through their spending decisions, ultimately determine what goods and services are produced.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'exchange traded fund' for disinvestment of public sector enterprises is managed by:

A. PFRDA

B. IRDAI

C. RBI

D. SEBI-registered asset management companies

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Correct Answer: Option D

Explanation:
PSU ETFs are managed by SEBI-registered asset management companies.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Climate-Related Financial Risks' discussion in central banking?

A. Central banks have no role in assessing climate risks

B. Physical and transition risks associated with climate change can affect the stability of the financial system and the transmission of monetary policy

C. Climate change is completely irrelevant for financial stability

D. Only physical risks matter and transition risks are irrelevant

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Correct Answer: Option B

Explanation:
Climate-related financial risks comprise physical risks (damage from extreme weather) and transition risks (losses from the adjustment to a low-carbon economy); both can impair financial institutions and the broader financial system.

This question belongs to: Economy GK Economy Set 1

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