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Worksheetscost analysis
Total questions: 17
Worksheet time: 11mins
Which of the following is not true about cost? (tick all that apply)
It is an expenditure
It can be actual or notional
It includes only the price incurred on a particular product
It can be the amount attributable to a particular item
the actual expenditure of funds on factors like material, rent, wages, etc.
opportunity cost
outlay cost
sunk cost
implicit cost
The total cost incurred due to an additional unit of product being produced.
Incremental cost
Sunk cost
Economic cost
Book cost
cost incurred at the time of temporary suspension of the production process
Close down cost
Abandonment cost
Shut down cost
Operation cost
money that has already been spent and which cannot be recovered.
Opportunity cost
Sunk cost
Out-of-pocket cost
Book cost
Economic cost consists of (tick all that apply)
Accounting cost
Implicit cost
Opportunity cost
Future cost
Implicit cost is used to calculate
Economic profit
Accounting profit
Future profit
All the above
total cost equals
TFC-TVC
TFC+TVC
TFC X TVC
NONE OF THE ABOVE
Which of the following is not true about AFC
AFC always slopes downwards regardless of production function.
When output is zero, AFC= TFC.
AFC will vary for each level of output.
AFC always slopes upwards regardless of production function.
None of the above
Which of the following is not true about AVC?
Average Variable Cost is calculated by dividing the Total Variable Cost by the amount of output.
AVC decreases, reaches zero and increases thereafter.
AVC cannot be computed when output is zero
None of the above
Which of the following is true about ATC?
Average Total Cost can be computed by dividing Total Cost by output
ATC first decreases, attains a minimum and increases thereafter.
ATC is the cost of producing one unit of output
All the above
Which of the following are the features of MC curve ( tick all that apply)
AVC and AC will slope downwards and keep falling as long as MC is below them
MC curve decreases first, reaches its minimum point and then raises upwards and passes through AVC and AC (ATC) at their minimum points.
It is found out by dividing change in total cost by change in output.
Marginal Cost is the change in the Total Cost in response to a unit increase in output
At least cost input combination
AC = MC
At this point AC will be minimum
At this point AVC will be minimum
MC cuts AC from below
MC=AVC
Which of the following are the features of a pure competitive market?
Large number of buyers and sellers
Standardized products
No transportation costs
Free entry and exit
Perfect mobility of factors of production
Which of the following are not true about perfect competition for perishable goods?
Supply is constant
Demand is constant
Higher the demand, higher the price
The seller will hold the product if demand goes below the reserve price.
Supply curve is a straight line parallel to X axis
Which of the following are the sources of monopoly competition ?
Equal Market Share among competing Firms
Economies of scope
Patent laws
Low / No transportation cost
Which of the following are true about monopoly market?
Profit maximizer
Cross elasticity of demand is one
Price taker
Price maker
No barriers for entry
