Theory of Cost and Economy System

From the theory of production, economic efficiency refers to _________________.

• the combination of inputs that will maximize outputs.

• the combination of inputs that involves minimal costs.

• the combination of inputs that involves decreasing costs.

• the combination of inputs that involves a constant cost.

Which statement of the following is true ?

• AC=TFC – TVC

• AC = AFC + TVC

• AC=TFC + AVC

• AC = AFC + AVC

per unit cost of a good is called:

• fixed cost

• variable cost

• average cost

• marginal cost

What is opportunity cost?

• the value of the next best option that is not selected when a choice is made.

• there is not enough of it.

• things people make to earn money.

• actions people do to earn money.

Costs that do not change when the quanity of output produced changes?

• Fixed Costs
• Variable Costs
• Explicit Costs
• Implicit Costs

Which one of the following is correct?

• (a) AFC = AVC + ATC

• (b) ATC = AFC – AVC

• (c) AVC = AFC + ATC

• (d) AFC = ATC – AVC.

Fixed costs + variable costs =

• Average costs

• Fixed Costs

• Total Cost

• Marginal Cost

The cost of one thing in terms of the alternative given up is known as:

• Production cost.

• Physical cost.

• Real cost.

• Opportunity cost.

What is the primary goal of cost theory?

• To maximize profit

• To minimize expenses

• To analyze and understand cost

• To measure revenue

What is the best description of an economic system?

• The physical infrastructure of a country

• The organization of resources and distribution of goods and services in a society

• The political system of a country

• The religious beliefs of the population

Answer explanation

An economic system refers to how a society organizes its resources to produce and distribute goods and services.