cost analysis

Which of the following is not true about cost? (tick all that apply)

• It is an expenditure

• It can be actual or notional

• It includes only the price incurred on a particular product

• It can be the amount attributable to a particular item

the actual expenditure of funds on factors like material, rent, wages, etc.

• opportunity cost

• outlay cost

• sunk cost

• implicit cost

The total cost incurred due to an additional unit of product being produced.

• Incremental cost

• Sunk cost

• Economic cost

• Book cost

cost incurred at the time of temporary suspension of the production process

• Close down cost

• Abandonment cost

• Shut down cost

• Operation cost

money that has already been spent and which cannot be recovered.

• Opportunity cost

• Sunk cost

• Out-of-pocket cost

• Book cost

Economic cost consists of (tick all that apply)

• Accounting cost

• Implicit cost

• Opportunity cost

• Future cost

Implicit cost is used to calculate

• Economic profit

• Accounting profit

• Future profit

• All the above

total cost equals

• TFC-TVC

• TFC+TVC

• TFC X TVC

• NONE OF THE ABOVE

Which of the following is not true about AFC

• AFC always slopes downwards regardless of production function.

• When output is zero, AFC= TFC.

• AFC will vary for each level of output.

• AFC always slopes upwards regardless of production function.

• None of the above

Which of the following is not true about AVC?

• Average Variable Cost is calculated by dividing the Total Variable Cost by the amount of output.

• AVC decreases, reaches zero and increases thereafter.

• AVC cannot be computed when output is zero

• None of the above