YEAR 11 ECONOMICS SECOND TERM UNIFIED TEST

What is cost in economics?

• The price of a good or service

• The expenditure incurred to produce a good or service

• The revenue earned from selling a good or service

• The profit earned from selling a good or service

Which of the following is a type of cost?

• Fixed cost

• Variable cost

• Semi-variable cost

• All of the above

What is fixed cost?

• A cost that changes with the level of production

• A cost that remains the same even if the level of production changes

• A cost that is incurred only once

• A cost that is incurred repeatedly

What is variable cost?

• A cost that remains the same even if the level of production changes

• A cost that changes with the level of production

• A cost that is incurred only once

• A cost that is incurred repeatedly

What is semi-variable cost?

• A cost that remains the same even if the level of production changes

• A cost that changes with the level of production

• A cost that has both fixed and variable components

• A cost that is incurred only once

What is opportunity cost?

• The cost of producing a good or service

• The benefit that is given up when a choice is made

• The revenue earned from selling a good or service

• The profit earned from selling a good or service

What is sunk cost?

• A cost that has already been incurred and cannot be changed

• A cost that will be incurred in the future

• A cost that can be avoided

• A cost that is incurred repeatedly

What is marginal cost?

• The additional cost of producing one more unit of a good or service

• The average cost of producing a good or service

• The total cost of producing a good or service

• The fixed cost of producing a good or service

What is average cost?

• The total cost of producing a good or service divided by the quantity produced

• The marginal cost of producing a good or service

• The fixed cost of producing a good or service

• The variable cost of producing a good or service

What is the importance of cost concept in business decision-making?

• It helps to determine the price of a good or service

• It helps to determine the quantity of a good or service to produce

• It helps to determine the profitability of a business

• All of the above