Business Costs

Types of cost in the curve are

• Total, variable and fixed

• Average and marginal

---------- resulting from a firm growing too large.

• External Diseconomies

• Internal Diseconomies

• Internal Economies

• External Economies

What are fixed costs in a business?

• Costs that vary with production levels

• Costs that remain constant regardless of production levels

• Costs that are incurred only once

• Costs that are related to marketing

Which of the following is an example of a variable cost?

• Rent

• Salaries

• Raw materials

• Insurance

What is the break-even point in business?

• The point where total revenue equals total costs

• The point where profit is maximized

• The point where losses are minimized

• The point where total costs are zero

Which cost is associated with the production of goods?

• Administrative costs

• Direct costs

• Indirect costs

• Sunk costs

What is opportunity cost?

• The cost of the next best alternative foregone

• The cost of all alternatives foregone

• The cost of current opportunities

• The cost of future opportunities

Which of the following is a direct cost?

• Factory rent

• Office supplies

• Direct labor

• Utilities

What is meant by economies of scale?

• Increasing costs with increased production

• Decreasing costs with increased production

• Constant costs with increased production

• Variable costs with increased production

Which of the following is a sunk cost?

• Future investment

• Past investment that cannot be recovered

• Current investment

• Potential investment