#1
Which of the following is a characteristic of a fixed cost?
It varies with the level of output.
It remains constant regardless of the level of output.
It decreases as production increases.
It is directly proportional to the level of output.
#2
What does the average fixed cost curve look like?
U-shaped
Downward sloping
Upward sloping
Horizontal
#3
In the short run, a firm's total variable cost (TVC) ________ as output increases.
Increases
Decreases
Remains constant
Becomes zero
#4
What does the average fixed cost (AFC) curve look like?
U-shaped
Downward sloping
Upward sloping
Horizontal
#5
Which cost concept represents the cost per unit of output?
Total cost
Average total cost
Fixed cost
Marginal cost
#6
Which of the following is a characteristic of a variable cost?
It remains constant regardless of the level of output.
It decreases as production increases.
It is inversely proportional to the level of output.
It varies with the level of output.
#7
What does the average variable cost curve typically look like?
U-shaped
Downward sloping
Upward sloping
Horizontal
#8
What does the average total cost (ATC) curve represent?
The total cost per unit of output.
The total cost at a specific level of output.
The average cost of production.
The total variable cost per unit of output.
#9
What is the relationship between average variable cost (AVC) and marginal cost (MC)?
AVC equals MC.
AVC is greater than MC.
AVC is less than MC.
There is no relationship between AVC and MC.
#10
Which cost curve becomes steeper as output increases?
Marginal cost curve
Average total cost curve
Average fixed cost curve
Average variable cost curve
#11
What does the total cost (TC) curve represent?
The total variable cost per unit of output.
The total cost at a specific level of output.
The average cost of production.
The total fixed cost per unit of output.
#12
Which cost is not directly accounted for in the short run?
Variable cost
Fixed cost
Total cost
Marginal cost
#13
What is the relationship between marginal cost and average total cost when marginal cost is below average total cost?
Marginal cost equals average total cost.
Marginal cost is greater than average total cost.
Marginal cost is less than average total cost.
Marginal cost is irrelevant in this case.
#14
What is the formula to calculate average fixed cost?
Total fixed cost / Total output
Total variable cost / Total output
Total fixed cost / Total variable cost
Total fixed cost / Total fixed input
#15
What is the relationship between marginal cost (MC) and average total cost (ATC) when MC is greater than ATC?
MC equals ATC.
MC is greater than ATC.
MC is less than ATC.
MC and ATC are independent of each other.
#16
Which of the following is true about economies of scale?
Average total cost decreases as output increases.
Average total cost increases as output increases.
Marginal cost increases as output increases.
Average variable cost remains constant as output increases.
#17
What does the long-run average cost curve (LRAC) depict?
The total cost per unit of output in the long run.
The relationship between output and fixed costs in the long run.
The lowest possible average cost for producing a given level of output in the long run.
The relationship between output and variable costs in the long run.
#18
Which of the following represents a diseconomy of scale?
Average total cost decreases as output increases.
Average total cost increases as output increases.
Marginal cost decreases as output increases.
Average variable cost remains constant as output increases.
#19
What happens to marginal cost (MC) when average variable cost (AVC) is at its minimum?
MC equals AVC.
MC is greater than AVC.
MC is less than AVC.
MC is at its maximum.