# Test: Theory Of Cost- 3

## 30 Questions MCQ Test Economics for CA CPT | Test: Theory Of Cost- 3

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Attempt Test: Theory Of Cost- 3 | 30 questions in 30 minutes | Mock test for CA Foundation preparation | Free important questions MCQ to study Economics for CA CPT for CA Foundation Exam | Download free PDF with solutions
QUESTION: 1

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QUESTION: 2

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QUESTION: 3

### A firm will close down in the short period if its average revenue is less than its:

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QUESTION: 4

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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QUESTION: 5

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

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QUESTION: 6

Which of the following cost curve will slope downward and does not touch the x-axis?

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QUESTION: 7

Consider the following data The Average Variable Cost (AVC) for an output of 4 units will be:-

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QUESTION: 8

Average Revenue Curve is also known as _________.

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QUESTION: 9

Payment made to outsiders for their goods and services are called :

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QUESTION: 10

When AC curve is rising, the MC curve must be ________ to it

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QUESTION: 11

What will be the total fixed cost for the production of three units as per the details given below? Solution:
QUESTION: 12

A firm encountering economies of scale over some range of output will have a:

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QUESTION: 13

In which of the following cases opportunity cost concept applies?

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QUESTION: 14 Calculate AFC at 2nd unit of output

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QUESTION: 15

Which statement among below is correct in reference in Average Fixed Cost

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QUESTION: 16

Opportunity cost is :

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QUESTION: 17

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

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QUESTION: 18

Which curve is never U-shaped?

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QUESTION: 19

External economies accrue due to ________:

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QUESTION: 20

Average Revenue Curve is also known as _________.

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QUESTION: 21

Which one of the following is correct?

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QUESTION: 22

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

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QUESTION: 23

Which of the following is known as Envelope curve?

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QUESTION: 24

Payment made to outsiders for their goods and services are called :

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QUESTION: 25

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

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QUESTION: 26

AFC curve is:

Solution:

The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases. AFC is equal to the vertical difference between ATC and AVC. Variable returns to scale explains why the other cost curves are U-shaped.

QUESTION: 27

A firm’s average fixed cost is Rs. 40 at 12 units. What will be the average fixed cost at 8 units:

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QUESTION: 28

Which of the following cost curves is never ‘U’ shaped?

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QUESTION: 29

Which of the following cost curves is never ‘U’ shaped?

Solution:

Average fixed cost curve is never U-shaped. The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases.

QUESTION: 30

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