Revision Quiz- Costs

7/30/2019 Revision Quiz- Costs

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Revision Quiz

Cost of productionGrade 8


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Questions

Question 1Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11Question 12

Question 13

Question 14

Question 15

Question 16

Question 17

Question 18

Question 19

First Slide


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1)A firms total revenue schedule is given inthe following table.

Unit of output TR

($)

1 16

2 32

3 48

4 64

What is the product price of the firm?

A. 16 B. 4 C. 2 D. 32


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2) The total cost of a firm producingshoes for the last year is as follows:

Rent for the factory Building - $ 3000Raw-materials - $ 2000Wages - $ 4600

Machinery - $ 600

What is the Variable Cost of the firm?

A. 3000 B. 6600 C. 600 D. 4600


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3) It is treated as a fixed cost becauseplant and machinery are assumed to

lose value due wear and tear. Itstands for;

A. Variable cost

B. Average cost

C. DepreciationD. Appreciation


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4) What is most likely to increase a

firms profits?

A. government controls on its prices.B. grants for the purchase of new machines.

C. an increase in the wages paid to its workers.

D. rising costs of its raw materials.


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5) The following table shows the TotalCost and Marginal Cost of a firm

producing cotton clothes.

What is the Marginal Cost of the firm for

producing 3 unit of Motor Bike?

A. 1500 B. 1200 C. 1550 D. 1050

No. of

unit

Total Cost

($)

Marginal Cost

($)

1 2000 2000

2 3500 15003 4700 ?

4 6200 1500


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6) Which statement about fixed costs is

correct?

A. They exist only in the long run.B. They include raw material and direct labour

costs.

C. They increase at the same rate as output.D. They must be paid even if there is no output.


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7) What is a fixed cost of production?

A. the commission paid to sales staff.

B. the cost of using the telephone.

C. the interest paid on a bank loan.

D. the money spent on repairs.


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8) What is not equal to the Average

Revenue?

A. the price of each unit.

B. the profit from each unit.

C. the revenue from each unit.

D. the total revenue divided by output.


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9) In short run, which one of the following

is described as Fixed Costs?

A. Fuel and power

B. Raw materials

C. Insurance on factory building

D. Wages


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10) Which one wouldlead to an increase

in a firms Variable Costs?

A. An increase in the interest rate charged on bankloans.

B. An increase in the price of raw materials.

C. An increase in rental charges on office building.

D. An increase in local authority rates.


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11) A firms average revenue is $10. Itsells 2000 units. What is the firms Total

Revenue and the price of the product?Total Revenue($) Price($)

AB

C

D

102000

20000

20000

10200

10

200


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12) Which group has profit maximization

as a goal?

A. Entrepreneurs

B. Governments

C. Savers

D. Workers


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13) The following information relates toa company producing shoes.

What is the profit per pair of shoes when

the firm is maximizing its profits?

A. $0.50 B. $1.00 C. $2.00 D. $3.00

Total output ofpairs of shoes

Total Costs($)

Total Revenue($)

100

200

300

400

1000

1800

2700

3200

1300

2200

3000

3400


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14) Which cost incurred by a firm

manufacturing shirts is a Variable Cost?

A. Building insuranceB. Interest on Bank loans

C. Raw materials

D. Rent on property


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15) In a company, Fixed Costs are a highproportion of the Total Costs.

What will result in the short run if productionis cut by 50%?

A. Average Cost will rise.B. Fixed Costs will fall.

C. Total Cost will remain Constant.

D. Variable Costs will rise..


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16) The table shows a firms AverageRevenue and Average Cost.

What level of output, A, B, C orD, givesmaximum profit?

Output

(Units)

Average

Revenue ($)

Average

Cost

A

B

C

D

5

10

15

20

10

20

25

30

30

20

15

18

A

17) Th di h th Fi d C t


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17) The diagram shows the Fixed Costs,Variable Costs and Total Costs of a firm.Which of the following represents FixedCosts?

A. PQ B. PS C. QR D. QS


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18) When it produces 100 units, a firmsTotal Variable Cost is $300 and its Total

Fixed Cost is $2700. Calculate theAverage Cost.

A. $3

B. $24

C. $27

D. $30


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19) A firm benefits from economies ofscale.

Which production cost must fall asa result?

A. Average Cost

B. External Cost

C. Fixed CostD. Total Cost


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Revision Quiz- Costs

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