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AP Intermediate 1st Year Production and Costs — practice questions — page 2

Explore 50 free Production and Costs questions in AP Intermediate 1st Year Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Production and Costs questions and exercises with answers

Showing questions 31–50 of 50.

The cost of employing fixed inputs in the short run is called what?Read the answer and worked solution →Which cost rises with output because the firm hires more variable inputs?Read the answer and worked solution →Total cost in the short run equals what?Read the answer and worked solution →A firm has total fixed cost of Rs 20 and total variable cost of Rs 18 at 2 units. What is total cost?Read the answer and worked solution →At zero output in the short run, total cost equals what?Read the answer and worked solution →Short run average cost is defined as total cost per unit of what?Read the answer and worked solution →A firm with total cost Rs 120 produces 8 units. What is its average cost?Read the answer and worked solution →Average variable cost is total variable cost divided by what?Read the answer and worked solution →Short run average cost is the sum of which two costs?Read the answer and worked solution →Total cost rises from Rs 38 to Rs 44 as output rises from 2 to 3 units. What is marginal cost of the third unit?Read the answer and worked solution →In the short run, a change in total cost from extra output is entirely due to which cost?Read the answer and worked solution →The sum of marginal costs up to a given output gives what?Read the answer and worked solution →What is the shape of the total fixed cost curve on a cost-output plane?Read the answer and worked solution →As output rises, what happens to average fixed cost?Read the answer and worked solution →Total fixed cost is Rs 100 and output is 20 units. What is average fixed cost?Read the answer and worked solution →Why is the short run marginal cost curve U-shaped?Read the answer and worked solution →At the first unit of output, how do SMC and AVC compare?Read the answer and worked solution →The SMC curve cuts the AVC curve at which point of AVC?Read the answer and worked solution →The total variable cost at an output is given by the area under which curve?Read the answer and worked solution →In a perfectly competitive market, how many buyers and sellers are there?Read the answer and worked solution →

Worked practice questions

The cost of employing fixed inputs in the short run is called what?

  1. Total fixed cost
  2. Total variable cost
  3. Marginal cost
  4. Average revenue
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Correct answer: A. Total fixed cost

Whatever the output, the payment for fixed inputs does not change, and it is called total fixed cost.

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Which cost rises with output because the firm hires more variable inputs?

  1. Total fixed cost
  2. Total variable cost
  3. Sunk cost paid earlier
  4. Normal profit earned
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Correct answer: B. Total variable cost

More output needs more variable inputs, which raises the cost paid for them.

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Total cost in the short run equals what?

  1. TVC minus TFC
  2. TFC less TVC
  3. TFC plus TVC
  4. TFC times TVC
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Correct answer: C. TFC plus TVC

Adding the cost of fixed inputs and the cost of variable inputs gives total cost.

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