Practice Topic 4

Which of the following is considered a fixed input in production?

• Number of daily hired workers

• Factory building

• Raw materials

• Electricity bills

Which curve shows how total output changes when only one input is increased while others stay fixed?

• Average product curve

• Marginal product curve

• Total product curve

• Cost curve

A firm maximizes profit when:

• Average cost equals average revenue

• Marginal cost equals marginal revenue

• Total cost is at its minimum

• Average product is constant

If the Total Fixed Cost (TFC) is RM120 and the output is 6 units, what is the Average Fixed Cost (AFC)?

• 12

• 20

• 24

• 30

In the short run, when only one input increases, the extra output produced is called:

• Marginal cost

• Total product

• Marginal product

• Variable product

Which of the following is considered a fixed cost?

• Petrol

• Salary based on hours worked

• Insurance premium

• Packaging materials

Which statement best describes the short-run production process?

• All inputs are fixed

• All inputs are variable

• Some inputs are fixed, others are variable

• Inputs remain unchanged regardless of output

In the long run, what is true about production inputs?

• All inputs are fixed

• Labour input remains unchanged

• Only capital can be changed

• All inputs can be varied

Which is the correct formula for economic profit?

• Total revenue - Explicit cost

• Total revenue - Implicit cost

• Total revenue - (Explicit + Implicit costs)

• Total cost - Implicit cost

If Total Cost increases from RM800 to RM880 as output increases from 8 to 9 units, what is the Marginal Cost (MC)?

• RM10

• RM20

• RM40

• RM80