Chapter 5 ECONOMICS : Cost and Revenue Analysis — Online MCQ Test
ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 5 ECONOMICS : Cost and Revenue Analysis with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers short-run and long-run cost concepts fixed and variable costs total average and marginal revenue curves under different market structures..
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Chapter 5 ECONOMICS : Cost and Revenue Analysis — Important Questions & Answers
Which of the following is a fixed cost in the short run?
- A. Raw materials cost
- B. Wages of daily labourers
- C. Factory rent
- D. Power charges based on output
Answer: C. Factory rent
Factory rent does not change with the level of output in the short run, so it is a fixed cost.
Factory rent does not change with the level of output in the short run, so it is a fixed cost.
Total cost is equal to:
- A. Fixed cost + Variable cost
- B. Average cost + Marginal cost
- C. Total revenue - Total profit
- D. Average revenue - Marginal revenue
Answer: A. Fixed cost + Variable cost
Total cost is the sum of fixed cost and variable cost in the short run.
Total cost is the sum of fixed cost and variable cost in the short run.
If total fixed cost is ₹1,000 and total variable cost is ₹2,500, what is total cost?
- A. ₹1,500
- B. ₹2,500
- C. ₹3,500
- D. ₹4,000
Answer: C. ₹3,500
Total cost = Fixed cost + Variable cost = ₹1,000 + ₹2,500 = ₹3,500.
Total cost = Fixed cost + Variable cost = ₹1,000 + ₹2,500 = ₹3,500.
Which statement is correct regarding average revenue and marginal revenue under perfect competition?
- A. AR is greater than MR
- B. AR is less than MR
- C. AR equals MR
- D. AR and MR are both zero
Answer: C. AR equals MR
Under perfect competition, the firm sells at a constant price, so AR = MR = price.
Under perfect competition, the firm sells at a constant price, so AR = MR = price.
Which of the following is the best explanation of why total fixed cost remains unchanged in the short run?
- A. Because all inputs are fixed in the long run
- B. Because fixed inputs cannot be altered immediately
- C. Because output is always constant
- D. Because variable costs are included in fixed cost
Answer: B. Because fixed inputs cannot be altered immediately
In the short run, some inputs like factory building and machinery cannot be changed immediately, so fixed cost remains unchanged.
In the short run, some inputs like factory building and machinery cannot be changed immediately, so fixed cost remains unchanged.