Average And Total Cost MCQs

Option A: be flat (horizontal)

Option B: slope upward

Option C: slope downward

Option D: be U-shaped.

Correct Answer: be U-shaped. ✔

Option A: average fixed cost is rising

Option B: average total cost is falling

Option C: average total cost is raising

Option D: average total cost is minimized

Correct Answer: average total cost is falling ✔

Option A: All costs are fixed in the short run.

Option B: All costs are variable in the long run

Option C: All costs are variable in the short run

Option D: All costs are fixed in the long run

Correct Answer: All costs are variable in the long run ✔

Option A: is linear (a straight line)

Option B: becomes steeper as the quantity of the input increase

Option C: could be any of these answers

Option D: becomes flatter as the quantity of the input increase

Correct Answer: becomes flatter as the quantity of the input increase ✔

Option A: Rs80,000

Option B: Rs30,000

Option C: Rs75,000

Option D: Rs70,000

Correct Answer: Rs30,000 ✔

Option A: variable costs

Option B: implicit costs

Option C: explicit costs

Option D: marginal costs

Correct Answer: implicit costs ✔

Option A: average fixed cost

Option B: average total cost

Option C: average variable cost

Option D: marginal cost

Correct Answer: average total cost ✔

Option A: an increase in average total costs

Option B: diseconomies of scale

Option C: economies of scale

Option D: constant returns to scale

Correct Answer: economies of scale ✔

Option A: average total cost is falling

Option B: average total cost is raising

Option C: average total cost is maximized

Option D: average total cost is minimized

Correct Answer: average total cost is minimized ✔

Option A: rent on the factory

Option B: wages paid to factory labor

Option C: interest payments on borrowed financial capital

Option D: payments on the lease for factory equipment

Correct Answer: wages paid to factory labor ✔

Option A: is liner (a straight line)

Option B: could be any of these answers

Option C: becomes steeper as the quantity of output increases

Option D: become flatter as the quantity of output increases.

Correct Answer: becomes steeper as the quantity of output increases ✔

Option A: accounting profit will exceed economic profit

Option B: economic profit will always be zero

Option C: economic profit will exceed accounting profit

Option D: accounting profit will always be zero

Correct Answer: accounting profit will exceed economic profit ✔

Option A: Rs30,000

Option B: Rs35,000

Option C: Rs75,000

Option D: Rs70,000

Correct Answer: Rs75,000 ✔

Option A: implicit costs

Option B: variable costs

Option C: the sum of implicit and explicit costs.

Option D: explicit costs.

Correct Answer: explicit costs. ✔