GCSE Economics Production costs

Which one of the following costs is most likely to be variable for a fast food restaurant?

• the salary of the manager
• the rent of the restaurant
• the cost of the food supplies
• the machinery used to cook the food

The best definition of variable costs is:

• They vary with the number of units produced.
• They vary over time.
• They vary with the prices charged by suppliers.
• They vary with tax rates set by government.

If variable costs are £6 per unit,then total variable costs of producing 7,000 units will be:

• £7,000

• £70,000

• £2,100

• £42,000

The best definition of fixed costs are those that do not vary with:

• time
• seasons
• output
• number of workers.

The total revenue of a business is:

• the same as profit
• equal to total costs
• quantity of units produced times unit production cost
• quantity of units sold multiplied by the sellingprice.

The break-even level of output is that number of units where:

• profit is at its highest level
• variable costs equal revenue
• total costs equal revenue
• variable costs equal fixed costs

Which of the following is the best definition of economies of scale?

• Costs fall as output increases.
• Costs per unit fall as the firm expands.
• Average costs rise as the firm expands.
• Fixed costs fall as output increases.

The amount a firm receives after all costs have been paid.

• Revenue
• Marginal Profit
• Profit
• Marginal Revenue

Which of the following calculations would you use to find total costs?

• Fixed Costs + Variable Costs

• Selling Price – Fixed Costs

• Total Fixed Costs / Selling Price – Variable Cost

• Total Fixed Costs/Variable Cost Per Item

What is likely to happen when the rate of interest increases?

• consumer spending increases

• firms costs rise

• people hold more cash

• savers earn lower rewards