1st Year Principles of Economics Chapter 6 TestFirm's Costs OF Production And Revenues

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. The costs which are directly related to output:

   1. Fixed cost

   2. Variable cost

   3. Total cost

   4. Marginal cost

2. The cost that a firm has to bear to produce an extra unit of output are called:

   1. Fixed cost

   2. Average cost

   3. Total cost

   4. Marginal cost

3. The rate of change in total cost is called:

   1. Average cost

   2. Marginal cost

   3. Average fixed cost

   4. Average variable cost

4. The change in total cost for the production of every new unit is called:

   1. Total cost

   2. Average cost

   3. Variable cost

   4. Marginal cost

5. Slope of average revenue and marginal revenue cures under monopoly is:

   1. Positive

   2. Negative

   3. Zero

   4. Vertical

6. When average cost curve is falling then marginal cost curve:

   1. Remains below it

   2. Remains above it

   3. Remains parallel to it

   4. Is vertical

7. Additional amount of money which a firm gets by selling an additional unity of output is called:

   1. Average revenue

   2. Marginal revenue

   3. Total revenue

   4. Revenue

8. Reward for factor of production is called:

   1. Cost of production

   2. Variable cost

   3. Fixed cost

   4. Average variable cost

9. The cost which increase with the increase in output and increase with the increase in output in the start period are called:

   1. Variable costs

   2. Fixed costs

   3. Average cost

   4. Marginal cost

10. Which is not included in variable cost:

    1. Price of raw material

    2. Wages of labour

    3. Rent of building

    4. Advertisement expenditures