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CA Foundation Production And Cost — practice questions — page 2

Explore 59 free Production And Cost questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Production And Cost questions and exercises with answers

Showing questions 31–59 of 59.

Marginal cost is best described as the additional cost of what?Read the answer and worked solution →The marginal cost of a car excludes which item?Read the answer and worked solution →If a firm's fixed cost doubles, what happens to its short-run marginal cost?Read the answer and worked solution →Marginal cost can be written as which expression using labor?Read the answer and worked solution →Why does short-run marginal cost eventually rise as output grows?Read the answer and worked solution →For a perfectly competitive firm, the supply curve is the part of MC above which curve?Read the answer and worked solution →The cost borne by the producing firm for one more unit is called what?Read the answer and worked solution →A negative externality of production exists when what is true?Read the answer and worked solution →The long run is the period in which which of these holds?Read the answer and worked solution →Which payment is an explicit cost of a firm?Read the answer and worked solution →Explicit costs involve which of the following?Read the answer and worked solution →Which alternative term is used for an implicit cost?Read the answer and worked solution →Accounting profit takes into account which costs?Read the answer and worked solution →How does economic profit compare with accounting profit?Read the answer and worked solution →A sunk cost is a cost that has what feature?Read the answer and worked solution →Another name for a sunk cost is which of these?Read the answer and worked solution →Sunk costs are contrasted with which type of cost?Read the answer and worked solution →By the bygones principle, which costs matter to a rational decision?Read the answer and worked solution →A person has not yet bought movie tickets. The ticket price is what kind of cost?Read the answer and worked solution →A firm pays 300 to produce 60 units, with no fixed cost. What is its average cost per unit?Read the answer and worked solution →Total fixed cost is 8,000. What is AFC at an output of 200 units?Read the answer and worked solution →TVC is 600 for 50 units. What is the average variable cost?Read the answer and worked solution →At 40 units, TFC is 1,200 and TVC is 800. What is AC at 40 units?Read the answer and worked solution →A firm has TFC of 900 and AVC of 15 at 60 units. What is its total cost?Read the answer and worked solution →Fixed cost is 500. Producing 5 units costs 700 in total and 6 units costs 760. What is the MC of the 6th unit?Read the answer and worked solution →A mill pays a monthly lease whatever it produces. Over the lease period, this payment is what?Read the answer and worked solution →Machines and land bought for a factory are generally classed as which cost in the short run?Read the answer and worked solution →What is the typical shape of the average variable cost curve?Read the answer and worked solution →The marginal cost curve always passes through the minimum points of which two curves?Read the answer and worked solution →

Worked practice questions

Marginal cost is best described as the additional cost of what?

  1. One more worker hired
  2. One more unit of output
  3. One more year of operation
  4. One more fixed asset
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Correct answer: B. One more unit of output

Marginal cost measures how much total cost rises when output goes up by one more unit.

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The marginal cost of a car excludes which item?

  1. Parts for the extra car
  2. Labor for the extra car
  3. Factory building cost
  4. Extra materials used
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Correct answer: C. Factory building cost

The factory building does not change with output, so it adds nothing to the cost of one more car.

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If a firm's fixed cost doubles, what happens to its short-run marginal cost?

  1. It doubles
  2. It is halved
  3. It becomes zero
  4. It is unaffected
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Correct answer: D. It is unaffected

Marginal cost is the change in variable cost per unit, and fixed cost does not vary with quantity.

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