Theory of Cost and Cost Production Quiz

Of the following statements about firms, which is not true?

• Firms will determine the types of goods and services that will be produced.

• Firms will determine the most efficient combinations of production inputs.

• Firms will try to minimize profit.

• Firms will try to maximise production.

In the concept of production, industries refer to

• large firms

• firms with a large capital

• a group of firms that produce the same type of goods

• a group of firms competing among each other

Production function shows the relationship between input and output.

• True

• False

Of the following statements about the concept of time periods, which is not true?

• In the short run, there are only fixed costs.

• In the long run, all inputs are considered to be variable inputs.

• In the short run, variable costs are higher than fixed cost.

• In the short run, all inputs are considered to be variable inputs.

Of the following, which is not considered to be a fixed input?

• Factory buildings

• Offices

• Raw materials

• Efficient managers

In a firm, fixed costs are RM600, average costs are RM4, and average variable costs are RM2. Total production of the firm is

• 100 units

• 150 units

• 200 units

• 300 units

Marginal cost changes due to changes in

• Total cost

• Average cost

• Variable cost

• Quantity of output

The total cost incurred for 10 units is RM 400 an 20 units is RM 800. Find the marginal cost.

• RM 400

• RM 40

• RM 200

• RM 20

Which of the following is true of the relationship between the marginal cost function and the average cost function?

• If MC is greater than ATC, then ATC is falling.

• The ATC curve intersects the MC curve at minimum MC.

• The MC curve intersects the ATC curve at minimum ATC.

• If MC is less than ATC, then ATC is increasing.

Average Revenue Curve is also known as ________.

• Profit curve

• Demand curve

• Supply curve

• Average cost curve