MCQs - Cost Commerce Notes | EduRev

Crash Course of Micro Economics -Class 12

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Commerce : MCQs - Cost Commerce Notes | EduRev

The document MCQs - Cost Commerce Notes | EduRev is a part of the Commerce Course Crash Course of Micro Economics -Class 12.
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Q.1 Implicit Cost  =

(a) Payments to others for purchasing inputs  from  the  market

(b) Opportunity cost of purchasing inputs from  the  market

(c) Value of self-owned inputs in their next best alternative use

(d) Both (a) and (b)
Ans: C

Q.2 
Opportunity cost of purchasing inputs fro the market is called:

(a) Money cost
(b) Real cost
(c) Explicit cost
(d) Implicit cost
Ans: C

Q.3 The expenditure incurred on the factors of production supplied by the entrepreneur himself comes under: 
(a) Implicit cost
(b) Explicit cost
(c) Fixed cost
(d) Variable cost
Ans: A

Q.4 
At what point does SMC curve intersect SAC curve?

(a) At the minimum of SAC
(b) At the minimum of SMC

(c) At the maximum of SAC
(d) None of the above
Ans: A

Q.5 
Cost of producing a goods is
(a) Actual expenditure on purchase of inputs
(b)  Accounting cost
(c) Imputed cost of self-owned resources
(d) Sum of (a) and (b)
Ans: D

Q.6 
Marginal cost is addition to the total cost when who an additional unit of a commodity is
(a) Sold
(b) Produced
(c) Employed
(d) Consumed
Ans: B

Q.7 
Which of the following is correct ?

(a) ATC & AVC  never intersect each other
(b) ATC is greater than AVC by the amount of AFC

(c) MC cuts AVC at its minimum point
(d) All of these
Ans: D

Q.8 Identify the two cost curves which start from the same point on the Y-axis:

(a) TVC and TFC
(b) TFC and TVC
(c) TFC and TC
(d) TFC and AFC
Ans: C

Q.9 
Which curve is not affected by fixed cost ?

(a) MC Curve
(b) TC Curve
(c) AC Curve
(d) AFC Curve
Ans: A

Q.10 
Normal Profits earned by a firm are included in :

(a) Implicit cost
(b) Explicit cost
(c) Fixed cost
(d) Variable cost
Ans: A

Q.11 
MC curve intersects AC curve at its _____ point and AVC curve at its _____ point.

(a) Maximum, minimum
(b) Minimum, Minimum
(c) Minimum, maximum
(d) Maximum, Maximum
Ans: B

Q.12 Minimum point of MC curve comes before the minimum point of:

(a) AC Curve
(b) AVC Curve
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Ans: C

Q.13 
Nishant, Tevleen and Manas are confused with the formula for deriving TC:

Nishant says: TC= TVC + TFC  & 

Tavleen says : TC  = AC × Output & 

Manas says : TC = Ó MC + TFC

Identify who amongst them is correct. 
(a) Nishant
(b) Manas
(c) Tavleen
(d) All of them
Ans: D

Q.14 
AVC can fall even when MC is rising, provided :

(a) MC <  AVC
(b) MC > AVC
(c) MC = AVC
(d) None of these
Ans: A

Q.15 
Which condition is incorrect?
(a) AC can rise when MC is falling
(b) AC can fall when MC is rising
(c) AVC can fall when MC is rising
(d) AC can rise when MC is rising
Ans: A

Q.16 
Total variable costs always

(a) increase
(b) increase at an increasing rate
(c) increase at a constant rate
(d) increase at a diminishing rate
Ans: A

Q.17 
Whatever expenditure is incurred for purchasing factor services is known as ...................?

(a) Social costs
(b) Opportunity costs
(c) Money costs
(d) Real costs.
Ans: C

Q.18 What are those costs which firms for obtaining factor services from outside ?

(a) Production costs
(b) Explicit costs
(c) Opportunity costs
(d) Implicit costs.
Ans: B

Q.19 
Which of following explains cost function ?

(a) C = f(q)
(b) C = f(p)
(c) C = f(0)
(d) None of these
Ans: A

Q.20  The TFC in the production process is Rs. 500.  The AVC of 100th unit is Rs. 6, then AC for 100th unit will be:
(a) Rs. 11
(b) Rs. 1
(c) Rs. 12
(d) Rs. 10
Ans: A

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