Economics MCQ Quiz

Which of the following is a fixed cost (FC)?

• Electricity bill for running machines.

• Rent for factory premises.

• Cost of raw materials for production.

• Wages paid to workers based on the number of hours worked.

Variable costs (VC) are defined as:

• Costs that remain constant regardless of the level of output.

• Costs that change directly with the level of output.

• Total costs minus fixed costs.

• The average cost of producing one more unit.

Which of the following costs decreases as the level of output increases?

• Total cost.

• Fixed cost.

• Marginal cost.

• Average fixed cost.

Marginal cost is defined as:

• The additional cost incurred by producing one more unit of output.

• Total cost divided by the quantity of output.

• Fixed cost divided by the quantity of output.

• The difference between total revenue and total cost.

If a company produces zero units of output, its total cost will equal:

• Total revenue.

• Marginal cost.

• Fixed cost.

• Variable cost.

A firm has the following costs: Fixed costs (FC) = $5,000 and Variable costs (VC) = $3,000. What is the Total Cost (TC)?

• $2,000

• $8,000

• $5,000

• $3,000

If Total Cost (TC) is $10,000 and Fixed Cost (FC) is $4,000, what is the Variable Cost (VC)?

• $6,000

• $14,000

• $4,000

• $10,000

A firm produces 50 units of output, incurring a Total Cost (TC) of $2,500. What is the Average Total Cost (ATC)?

• $50

• $25

• $500

• $2,500

If a firm's Fixed Cost (FC) is $800 and it produces 40 units, what is the Average Fixed Cost (AFC)?

• $40

• $20

• $8

• $800

If a firm's Variable Cost (VC) increases from $5,000 to $6,500 as output increases from 100 to 150 units, what is the Marginal Cost (MC) of producing one additional unit?

• $10

• $15

• $30

• $50