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Test: Theory Of Cost- 1 - CA Foundation MCQ


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30 Questions MCQ Test Business Economics for CA Foundation - Test: Theory Of Cost- 1

Test: Theory Of Cost- 1 for CA Foundation 2024 is part of Business Economics for CA Foundation preparation. The Test: Theory Of Cost- 1 questions and answers have been prepared according to the CA Foundation exam syllabus.The Test: Theory Of Cost- 1 MCQs are made for CA Foundation 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Theory Of Cost- 1 below.
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Test: Theory Of Cost- 1 - Question 1

Suppose the total cost of production of commodity ‘X’ is Rs. 1, 25,000 Out of other cost implicit is Rs. 35,000 and normal profit is Rs. 25,000 what will be the explicit cost of commodity ‘X’?

Test: Theory Of Cost- 1 - Question 2

The average fixed cost for producing an output of 6 units of a product by a firm is Rs. 30. The same cost for producing an output of 4 units will be Rs. _________.

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Test: Theory Of Cost- 1 - Question 3

Which of the following curve is not U shaped?

Detailed Solution for Test: Theory Of Cost- 1 - Question 3

The Average fixed cost curve represent the relationship between average fixed cost and quantity produced. It is relatively high when the quantity of output is small and declines as the quantity produced increases. AFC curve is negatively sloped and therefore can not be U shaped.

Test: Theory Of Cost- 1 - Question 4

Fixed cost is known as _______cost. 

Detailed Solution for Test: Theory Of Cost- 1 - Question 4

Fixed costs are expenses that have to be paid by a company, independent of any specific business activities. Fixed cost is known as Overhead cost.

Test: Theory Of Cost- 1 - Question 5

 The cost of resources owned and employed by the entrepreneur himself in his business is termed as ________ cost.

Test: Theory Of Cost- 1 - Question 6

Direct cost is also known as: 

Test: Theory Of Cost- 1 - Question 7

A firm’s total cost is Rs. 200 at 5 units of output and Rs. 220 at 6 units of output. The marginal cost of producing 6th of output will be ______.

Test: Theory Of Cost- 1 - Question 8

The change in total cost due to one unit change in the output is called _______ cost.

Test: Theory Of Cost- 1 - Question 9

Long run price is also called by the name of ________.

Test: Theory Of Cost- 1 - Question 10

Units          0    1  2    3   4
Total Cost 20  30 40  45  50
What will be the AFC at 4 units of output?

Test: Theory Of Cost- 1 - Question 11

 What will be marginal cost of 67 units of production accounting to the table given below:

Test: Theory Of Cost- 1 - Question 12

 Cost in terms of pain, discomfort, disability involved in supplying the various factors of production by their owners are termed as________.

Test: Theory Of Cost- 1 - Question 13

Supply curve remaining unchanged, an increase in demand will lead to.

Test: Theory Of Cost- 1 - Question 14

What will be the TVC if we produce 2 units?
Units  0    1    2
TC    20  37  50

Test: Theory Of Cost- 1 - Question 15

Calculate AFC at 2nd unit of output 

Test: Theory Of Cost- 1 - Question 16

AFC curve is:

Test: Theory Of Cost- 1 - Question 17

 Which of the following is known as Envelope curve?

Test: Theory Of Cost- 1 - Question 18

The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

Test: Theory Of Cost- 1 - Question 19

A firm’s average fixed cost is Rs. 20 at 6 units of output what will it be at 4 units of output?

Test: Theory Of Cost- 1 - Question 20

 When shape of average cost curve is upward, marginal cost : 

Test: Theory Of Cost- 1 - Question 21

Calculate AFC of 3 units form the following data:
Unit           0    1    2   3
Total cost 30  40  50  60

Test: Theory Of Cost- 1 - Question 22

 Which curve is never U-shaped?

Test: Theory Of Cost- 1 - Question 23

Suppose, the total cost of production of commodity X is Rs. 1,25,000. Out of this cost implicit cost Rs. 35,000 and normal profit is Rs. 25,000. What will be the explicit cost of commodity X?

Test: Theory Of Cost- 1 - Question 24

The total cost incurred for 10 units is Rs. 400 and 20 units is Rs. 800. Find the marginal cost. 

Detailed Solution for Test: Theory Of Cost- 1 - Question 24

Calculation of Marginal Cost

- Firstly, calculate the cost per unit for 10 units:
Total cost for 10 units = Rs. 400
Cost per unit for 10 units = Rs. 400 / 10 = Rs. 40

- Next, calculate the cost per unit for 20 units:
Total cost for 20 units = Rs. 800
Cost per unit for 20 units = Rs. 800 / 20 = Rs. 40

- Now, calculate the marginal cost using the formula:
Marginal Cost = Cost for additional units - Cost for initial units
Marginal Cost = Cost for 20 units - Cost for 10 units
Marginal Cost = Rs. 800 - Rs. 400
Marginal Cost = Rs. 400

Therefore, the marginal cost is Rs. 40.

Test: Theory Of Cost- 1 - Question 25

 Opportunity cost is : 

Test: Theory Of Cost- 1 - Question 26

 Implicit cost may be defined as the :

Test: Theory Of Cost- 1 - Question 27

A firm’s average fixed cost is Rs. 20 at 6 units of output. What will it be at 3 units of output?

Test: Theory Of Cost- 1 - Question 28

Find Average Fixed cost of 3 units

Test: Theory Of Cost- 1 - Question 29

Returns to scale will said to be in operation when quantity of: 

Test: Theory Of Cost- 1 - Question 30

 External economies accrue due to ________:

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