WorksheetsABBE1033 Lecture 5 Production and Costs
Total questions: 13
Worksheet time: 10mins
Name
Class
Date
1.
How is Average Total Cost (ATC) calculated?
a)
ATC = TC × Q
b)
ATC = TC ÷ Q
c)
ATC = TC + Q
d)
ATC = TC - Q
2.
What is the formula for calculating Marginal Cost (MC)?
a)
MC = ΔTC ÷ ΔQ
b)
MC = TC ÷ Q
c)
MC = ΔTC × ΔQ
d)
MC = TC - Q
3.
If Total Fixed Costs (TFC) are $1000 and output (Q) is 100 units, what is the Average Fixed Cost (AFC)?
a)
$10 per unit
b)
$100 per unit
c)
$1 per unit
d)
$1000 per unit
4.
In the short run, which of the following costs remains constant regardless of output?
a)
Total Variable Costs
b)
Total Fixed Costs
c)
Average Variable Costs
d)
Marginal Costs
5.
What happens to Average Variable Cost (AVC) as output increases in the short run?
a)
It always decreases
b)
It always increases
c)
It first decreases, then increases
d)
It remains constant
6.
Which of the following best describes a sunk cost?
a)
A cost that varies with output
b)
A cost that can be recovered
c)
A fixed cost that occurs in the future
d)
A cost incurred in the past that cannot be changed by current decisions
7.
What does the Long-Run Average Total Cost (LRATC) curve represent?
a)
The total cost of production in the long run
b)
The marginal cost of production in the long run
c)
The average cost per unit when all inputs can be adjusted
d)
The fixed costs in the long run
8.
Which of the following describes economies of scale?
a)
When inputs increase by some percentage and output increases by a smaller percentage
b)
When inputs increase by some percentage and output increases by the same percentage
c)
When inputs increase by some percentage and output increases by a greater percentage
d)
When inputs decrease and output increases
9.
What happens to LRATC during diseconomies of scale?
a)
It falls
b)
It rises
c)
It remains constant
d)
It becomes zero
10.
Which of the following is NOT a reason for economies of scale?
a)
Greater employee specialization
b)
Efficient mass production techniques
c)
Improved coordination in large firms
d)
Lower setup costs per unit of output
11.
What is the primary cause of diseconomies of scale?
a)
Increased employee specialization
b)
More efficient production techniques
c)
Coordination and communication problems in large firms
d)
Lower fixed costs
12.
If Total Cost (TC) is $5000 and Total Variable Cost (TVC) is $3000, what is the Total Fixed Cost (TFC)?
a)
$2000
b)
$8000
c)
$1667
d)
$15000000
13.
If Average Total Cost (ATC) is $50 and Average Variable Cost (AVC) is $30, what is the Average Fixed Cost (AFC)?
a)
$20
b)
$80
c)
$1500
d)
$15
100 %
