Production and Costs MCQs
Production and Costs MCQs
Try to answer these 40 Production and Costs MCQs and check your understanding of the Production and Costs subject.
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1: Accounting profits are Total revenues minus total _______
A. Implicit costs
B. Explicit Costs
C. None of These
D. Both of These
2: Average fixed cost is ________ divided by output
A. Fixed Cost
B. Variable Cost
C. Total Cost
D. Explicit Cost
3: Average total cost is ________ divided by output
A. Fixed Cost
B. Variable Cost
C. Total Cost
D. Explicit Cost
4: Average variable cost is ________ divided by output
A. Fixed Cost
B. Variable Cost
C. Total Cost
D. Explicit Cost
5: Constant returns to scale are Returns that occur in an output range where _____ does not change.
A. SRATC
B. LRATC
C. LRAFC
D. SRAFC
6: Diminishing marginal product variable input ____, with other inputs ____.
A. Fixed,Increases
B. Increases,Fixed
C. Decreases,Fixed
D. Fixed,Decreases
7: ______ rises as output expands in Diseconomies of scale.
A. SRATC
B. LRATC
C. LRAFC
D. SRAFC
8: Economic profits is Total revenues minus
A. Implicit costs
B. Explicit Costs
C. None of These
D. Both of These
9: ______ falls as output increases in Economies of scale.
A. LRATC
B. SRATC
C. LRAFC
D. SRAFC
10: Opportunity costs of production that require a monetary payment is known as
A. Implicit costs
B. Fixed costs
C. Explicit costs
D. Variable Costs
11: _______ Costs are the Costs that do not vary with the level of output.
A. Implicit costs
B. Fixed costs
C. Explicit costs
D. Variable Costs
12: The costs of production that do not require a monetary payment is ______
A. Implicit costs
B. Fixed costs
C. Explicit costs
D. Variable Costs
13: A period over which all production inputs are variable is called
A. Long Run
B. Short Run
C. Small Run
D. Production Run
14: Change in total costs resulting from a _____ in output is called Marginal cost
A. Multi - Unit change
B. One - unit change
C. Two - Unit change
D. Zero - Unit change
15: Marginal product is The change in total output of a good that results from a ______ change
A. Multi - Unit
B. One - unit
C. Two - Unit
D. Zero - Unit
16: _____ function is The relationship between the quantity of inputs and outputs produced
A. Consumption
B. Production
C. Profit
D. Variable
17: ______ is the difference between total revenues and total costs
A. Profits
B. Losses
C. Accounts
D. Assets
18: A period too brief for some production inputs to be varied is known as
A. Long Run
B. Short Run
C. Small Run
D. Brief Run
19: Sunk costs can’t be _____.
A. Reproduced
B. Recovered
C. Produced
D. None of the above
20: The _____ of the firm’s fixed costs and variable costs is total cost.
A. Sum
B. Difference
C. Product
D. Division
21: The total output of a good produced by the firm is the total product.
A. True
B. False
22: Costs that vary with the level of output are variable costs.
A. True
B. False
23: What are implicit costs?
A. Variable costs that impact long-run average total costs
B. Production costs related to equipment but not materials
C. Administration costs that do not impact production
D. Production costs that do not require an outlay of money
24: Which of the following is TRUE?
A. An accounting profit is less than an economic profit.
B. An economic profit is less than an accounting profit.
C. Economic profits do not consider implicit costs.
D. Accounting profits do not consider explicit costs.
25: What do economists call expenses that have been incurred and cannot be recovered?
A. Sunk costs
B. Marginal costs
C. Implicit costs
D. Indirect costs
26: In terms of production, what do economists mean by the short run?
A. The time from the opening of a business to its first profits
B. A period too brief for some production inputs to be varied
C. The period during which initial staff is hired and trained
D. The length original equipment is expected to last
27: One way an increase in workers can increase marginal product is that it ______.
A. Increases revenue from sales
B. Allows workers to specialize
C. Raises per-unit fixed costs
D. Lowers the output per worker
28: What do economists mean by production function?
A. The per-unit cost of inputs compared to the sale price of outputs
B. The correlation between marginal product and marginal costs
C. The balance between economic profits and accounting profits
D. The relationship between quantity of inputs and quantity of outputs
29: What are the two categories of short-run costs in a business?
A. Fixed costs and explicit costs
B. Fixed costs and variable costs
C. Variable costs and explicit costs
D. Sunk costs and implicit costs
30: What is average total cost?
A. A profitability measurement
B. An assessment of productivity
C. An estimate of economic profits
D. A per-unit cost of production
31: What is shown in the equation ΔTC/Δq?
A. Total product
B. Marginal cost
C. Marginal product
D. Average cost
32: When marginal product rises, ______ falls.
A. Total product
B. Quantity of labor
C. Marginal cost
D. Variable input
33: Why is average total cost usually relatively high at very low levels of output?
A. High average fixed costs
B. High average variable costs
C. Diminishing marginal product
D. Increasing marginal product
34: When ATC falls it is primarily because ______ is declining.
A. AVC
B. AFC
C. Output
D. TC
35: Business’s long-run average total cost curves are typically better than their short-run total cost curves because ______.
A. Their fixed costs decline over time
B. They can adjust more of their inputs in the long run
C. In the long run, their employees become more experienced
D. Constant returns to scale drive down variable costs
36: When LRATC falls as output expands, ______.
A. The cost of one more unit of output rises
B. Minimum efficient scale has been reached
C. Economies of scale are present
D. Marginal product is diminishing
37: What do economists call the cost disadvantages that occur in an output range where LRATC rises as output expands?
A. Diseconomies of scale
B. Minimum efficient scales
C. Constant returns to scale
D. Economies of scale
38: The __________ function will return the number of characters in a given string.
A. Concatenation
B. Length_Of()
C. Consecutive
D. Element
39: During the progressive era, economic production shifted from ____ to ____.
A. Capital goods, consumer products.
B. Consumer products , Capital goods.
C. Both a and b
D. None of above
40: Constant returns to scale are features of a firm's technology that _______.
A. Make average total cost rise as output increases
B. Drive average total cost to zero
C. Keep average total cost constant as output increases
D. Make average total cost fall as output increases
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Production and Costs MCQs
