Cost Concepts
Economics ⇒ Consumer and Producer Behaviour
Cost Concepts starts at 11 and continues till grade 12.
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See sample questions for grade 12
Define the term 'opportunity cost' in the context of production.
Describe the behaviour of average fixed cost as output increases.
Describe the relationship between total cost, total fixed cost, and total variable cost.
Distinguish between short run and long run in the context of cost concepts.
A firm incurs the following costs at 10 units of output: Total Fixed Cost = ₹200, Total Variable Cost = ₹800. Calculate the Average Total Cost.
A firm’s total cost at 0 units of output is ₹1,000. What is its total fixed cost?
A firm’s total cost at 5 units is ₹1,500 and at 6 units is ₹1,620. What is the marginal cost of the 6th unit?
A firm’s total fixed cost is ₹600. If it produces 20 units, what is its average fixed cost?
Which of the following costs is also known as 'overhead cost'? (1) Variable cost (2) Fixed cost (3) Marginal cost (4) Sunk cost
Which of the following costs is relevant for future decision making? (1) Sunk cost (2) Opportunity cost (3) Fixed cost (4) Past cost
Which of the following is a feature of variable cost? (1) It remains constant at all output levels (2) It is incurred even at zero output (3) It increases as output increases (4) It is also called overhead cost
Which of the following is a sunk cost? (1) Payment for raw materials (2) Wages paid to workers (3) Cost of machinery already purchased (4) Rent paid for the current month
Fill in the blank: In the short run, at zero level of output, total variable cost is __________.
Fill in the blank: The cost incurred on the purchase of raw materials is a type of __________ cost.
Fill in the blank: The cost per unit of output is called __________ cost.
Fill in the blank: The cost that arises due to the use of self-owned resources is called __________ cost.
State whether the following statement is true or false: Average fixed cost increases as output increases.
State whether the following statement is true or false: In the long run, all costs are variable.
State whether the following statement is true or false: Marginal cost is the addition to total cost when one more unit of output is produced.
State whether the following statement is true or false: Opportunity cost is always a monetary cost.
