WorksheetsEND OF UNIT TEST - COST AND REVENUE
Total questions: 73
Worksheet time: 2hrs 26mins
ΔTR/ΔQ = _____
Identity curve number 2
Fixed cost
Variable cost
Total cost
Marginal cost
The best definition for fixed costs is
Costs that do not depend on the level of production
Costs that do not change
Costs that increase when you produce more
Which of the following are fixed costs?
Rent
Cost of part time labour
Material costs
Loan payments
What does productivity mean?
productivity is how products are made
productivity is a measure of how many workers a business has
productivity measures efficiency
productivity measures effectiveness
Which of these isn't a method of improving productivity?
employing more staff
providing pay incentives
investing in up-to-date machinery
training staff
Which of the following statements is correct?
the level of production is the total number of goods produced per worker
productivity can be measured by output per worker in a given time period
increasing production leads to increased productivity
reducing productivity per worker will increase the number of workers
One of the benefits of increasing productivity is:
more workers will be employed
total production will increase with the same number of workers
average costs will stay the same
fewer raw materials will be needed to produce the same level of output
Labour productivity could be increased by all of the following except:
using more technologically advanced machines
increasing the amount of automation
improved training of workers
employing more workers to produce the same level of output
Which of the following is the best definition of 'an increase in efficiency'?
higher output levels than last year
lower total costs of production
fewer workers employed but output level remains the same
10% more workers employed and output also rises by 10%
Which one of the following is NOT a factor of production?
land
table
capital
enterprise
What impact does increasing production have on a company's variable costs?
Variable costs decrease
Variable costs remain constant
Variable costs increase
Variable costs are eliminated
What is a subsidy?
A subsidy is a tax imposed on businesses.
A subsidy is a loan that must be repaid with interest.
A subsidy is a type of insurance policy for farmers.
A subsidy is a government payment to encourage or protect a certain economic activity
Revenue =
Costs - Profit
Costs + Profit
Costs x profit
Costs / Profit
Revenue =
Costs - Profit
Costs + Profit
Costs x profit
Costs / Profit
When MR is zero, then,
TR is minimum
TR is 0
TR is maximum
TR is equal to MR
Average revenue is equal to
Price
Total revenue
Total cost
The price at which goods or services are offered by a business to their customers is called
Selling price
Cost
Variable cost
Currency
Costs that must be paid regardless of how much of a good or service is produced. They do not change in the short term, regardless of output are called
Variable costs
Fixed costs
Total costs
The costs
Fixed Cost + Variable Cost =
Breakeven point
Total costs
Fixed costs
Variable costs
A negative difference between the revenues taken in by a business and the costs of operating a business (when a business spends more than it makes) :(
Profit
Breakeven
Loss
Closed
Costs that change based on the amount of goods and services produced.
Total costs
Fixed costs
Variable costs
Costs
Rent, administrative costs, insurance, employee salary are examples of ...
Variable costs
Fixed costs
Costs
Prices
A positive difference between the revenues taken in by a business and the costs of operating a business (when a business makes more than it spends). :D
Loss
Profit
Breakeven
Sales
Raw materials, packaging, wages/labour costs are examples of
Total costs
Fixed costs
Variable costs
Benefits
The income (amount of money) a business receives for in exchange for a product or service
Costs
Profit
Loss
Sales revenue
Which two of the following are variable costs
Raw materials
Rent
Insurance
Water
Salary
Revenue = £100,000
Cost of sales = £50,000
Other expenses = £25,000
What is the gross profit?
£25,000
£50,000
£100,000
£75,000
Raw materials: £100
Rent: £200
Interest on a bank loan £50
Cost of packaging £30
Total operational expenses: ?
£380
£250
£130
£280
Fill in the blank. Economies of scale is when as output _________, unit costs ________ in the long run.
increases; decrease
increases; increase
decreases; increase
decreases; decrease
Internal economies of scale are those that
Result from changes in production techniques
Increase due to the growth of the industry as a whole
Generate lower per unit production costs
Reduce production costs in the short run
Larger firms are better able to diversify into a range of product areas or markets and thus lessen their risk. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can afford to advertise and sell in larger quantities to develop brand loyalty. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can negotiate better interest rates on loans; this reduces the costs of borrowing for larger companies. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can buy raw materials in bulk at more favourable rates. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Fill in the blank. __________ economies of scale occur due to an increase in the scale of production within a single firm
Internal
External
Complex
Simple
Larger firms can hire specialists (e.g. managers, accountants) and are therefore able to increase productivity. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Which of the following EOS refers to improving the production process?
Financial
Managerial
Technical
Purchasing
Machinery is likely to be efficient. what economies does it indicate?
Diseconomies of Scale result in a lower per unit production cost over the long run
True
False
External economies of scale can arise from
Bulk purchases of raw materials, parts and components at favorable prices by a particular business/firm
Purchase and use of physical/human capital by a particular business/firm
Greater availability of skilled laborers for a particular industry in a particular area
A business/firm being able to obtain lower interest rates on loans
Economies of scale occurring within an industry
Internal economies of scale
External economies of scale
Diseconomies of scale
Control: It becomes harder to monitor how productive the
Coordination: It is complicated to coordinate every worker
Communication: Workers feel alienated as the firm grows.
All three
What does the 'Law of Diminishing Returns' state about variable resources?
The marginal product obtained from the additional variable resources will increase indefinitely.
The marginal product obtained from the additional variable resources will remain constant.
The marginal product obtained from the additional variable resources will begin to decline after some point.
The marginal product obtained from the additional variable resources is not related to the quantity of resources.
What is the marginal product of the 3rd worker according
to the table provided?
A) 2 cakes
B) 3 cakes
C) 5 cakes
D) 6 cakes
At what point does diminishing returns set in, as per the cake baking example?
A) After the 3rd worker
B) After the 4th worker
C) After the 5th worker
D) After the 6th worker
What is the marginal product of the 7th worker?
0 cakes
1 cake
2 cakes
3 cakes
What is the marginal product of the 7th worker?
0 cakes
1 cake
2 cakes
3 cakes
