Cost Analysis in Economics Quiz
Explore cost analysis with questions on variable cost, marginal cost, fixed cost, breakeven point, and more. Test your understanding now!
#1
In cost analysis, what does the term 'marginal cost' refer to?
The total cost of production
The additional cost of producing one more unit
The fixed cost of production
The average cost per unit
#2
What is the formula for calculating average variable cost?
Total Variable Cost / Quantity
Total Variable Cost - Quantity
Total Variable Cost * Quantity
Quantity / Total Variable Cost
#3
Which of the following is a fixed cost in economics?
Raw materials
Labor costs
Rent for factory space
Variable production costs
#4
What is the primary purpose of conducting a cost-benefit analysis?
To determine the total cost of production
To assess the benefits and costs of a decision or project
To calculate average variable cost
To identify fixed costs
#5
What does the term 'economies of scale' refer to in cost analysis?
Increasing average total cost as production increases
Decreasing average total cost as production increases
Fixed costs remaining constant as production increases
Variable costs decreasing as production increases
#6
What is the equation for calculating average fixed cost?
Total Fixed Cost / Quantity
Total Fixed Cost - Quantity
Total Fixed Cost * Quantity
Quantity / Total Fixed Cost
#7
Which cost is considered a sunk cost in economic analysis?
Variable cost
Opportunity cost
Marginal cost
Costs that cannot be recovered
#8
What is the relationship between total cost (TC), total variable cost (TVC), and total fixed cost (TFC)?
TC = TVC - TFC
TC = TVC + TFC
TC = TVC * TFC
TC = TVC / TFC
#9
Which cost is also known as the 'avoidable cost'?
Sunk cost
Opportunity cost
Marginal cost
Variable cost
#10
In the context of cost analysis, what is the difference between explicit costs and implicit costs?
Explicit costs involve monetary payments, while implicit costs do not.
Implicit costs involve monetary payments, while explicit costs do not.
Both explicit and implicit costs involve monetary payments.
Neither explicit nor implicit costs involve monetary payments.
#11
What is the significance of the breakeven point in cost analysis?
It represents the point where total revenue equals total cost.
It indicates the highest production level for maximum profit.
It is the point where fixed costs are minimized.
It represents the point where variable costs equal fixed costs.
#12
What is the difference between accounting profit and economic profit?
Accounting profit includes explicit costs only, while economic profit includes both explicit and implicit costs.
Accounting profit includes both explicit and implicit costs, while economic profit includes explicit costs only.
Both accounting profit and economic profit include only explicit costs.
Neither accounting profit nor economic profit includes any costs.
#13
What is the relationship between marginal cost and marginal revenue at the profit-maximizing output level?
Marginal cost equals marginal revenue.
Marginal cost is greater than marginal revenue.
Marginal cost is less than marginal revenue.
There is no relationship between marginal cost and marginal revenue.
Sign In to view more questions.
Quiz Questions with Answers
Forget wasting time on incorrect answers. We deliver the straight-up correct options, along with clear explanations that solidify your understanding.
Popular Quizzes in Cost Analysis
Popular Quizzes in Economics
Report