The concept of 'Break-even Point' in economics refers to: MCQ with Answer and Explanation

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The concept of 'Break-even Point' in economics refers to:

A. The level of output where average cost is maximum

B. The level of output where profit is maximum

C. The level of output where marginal cost is minimum

D. The level of output where total revenue equals total cost

Answer: Option D

Solution (By JKSSB Mock Tests)

The break-even point is the level of output at which total revenue equals total cost, so that economic profit is zero.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of economic theory, the 'Production Possibility Frontier' shifts outward when there is:

A. Decrease in the labour force

B. Inefficient allocation of resources

C. Economic growth due to increase in resources or technology

D. Unemployment of resources

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Correct Answer: Option C

Explanation:
An outward shift of the PPF indicates economic growth, which can result from an increase in the quantity or quality of resources or from technological progress.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Keynesian cross' model shows equilibrium income where:

A. interest rate equals inflation

B. aggregate demand equals aggregate supply

C. money supply equals money demand

D. exports equal imports

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Correct Answer: Option B

Explanation:
The Keynesian cross shows equilibrium where aggregate demand equals aggregate supply.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' is applicable in:

A. only special economic zones

B. only states

C. all states and union territories

D. only union territories

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Correct Answer: Option C

Explanation:
GST applies throughout India including states and union territories.

This question belongs to: Economy GK Economy Set 1

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