Cost Curves: AP Microeconomics Online Test

Which of the following cannot be categorized as variable cost?
Factory manager’s salary
Factory labour’s wages
Depreciation of factory
Charges paid for factory electricity
Service changes of machines
With an increase in output, after a point of time, the short run AC curve starts rising because:
Increased production leads to lower price per unit
The prevalence of Law of Variable Proportions
The fixed cost starts rising
The average fixed cost rises sharply
All of the above
When the Average Cost is constant, Marginal Cost
Is falling
Is rising
Is constant
Is greater than Average Cost
Is equal to Average Cost
With an increase in the output, the Long run Average Cost Curve falls because of:
Economies of scale and size
Lower Managerial cost per unit of output
Lower Cost of Finance
Lower input price
All of the above
A firm producing at the minimum point of the Long run Average Cost curve:
Operates at excess capacity
Operates at falling costs
Operates at rising costs
Operating at optimum level of plant
None of the above
For a U-shaped Average Cost Curve:
Marginal Cost always falls when Average Cost rises
Marginal Cost always rises when Average Cost rises
Marginal Cost always falls when Average Cost falls
Marginal Cost always rises when Average Cost falls
Marginal Cost always remains constant when Average Cost rises
For the Long Run Average Cost Curve and the Short Run Average Cost Curve, which of the following is acceptable?
The lowest point on each Short run Average Curve is the point of tangency with Long run Average Cost Curve
The lowest point on an Short run Average Curve is tangent to the Long run Average Cost Curve at the highest point of the Long run Average Cost Curve
Each Short run Average Curve is parallel to Long run Average Cost Curve
The lowest point on an Short run Average Curve is tangent to the Long run Average Cost Curve at the lowest point of the Long run Average Cost Curve
None of the above
Till the time the Average Cost Curve falls, the Marginal Cost is:
Equal to Average Cost
Greater than Average Cost
Less than Average Cost
Equal to Total Cost
Is not related to Average Cost
The curve with the shape of a Rectangular Hyperbola is:
Total Cost Curve
Average Total Cost Curve
Average Variable Cost Curve
Marginal Cost Curve
Average Fixed Cost Curve
The Average Variable Cost Curve:
Is a downward sloping straight line from left to right
Slopes upwards first, after that remains constant and finally falls downwards
Slopes downwards first, after that it remains constant and then rises upwards
Is an upward sloping straight line from left to right
All of the above
Description:

In Microeconomics, the study of concept of Production is incomplete without the concept of Cost Curves. Here is a 7-minute short test on the Cost Curves. You’ll find Multiple Choice questions on the basics of Short-run Cost Curves and Long-run Cost Curves. Be prepared to catch up on various concepts like Average Fixed Costs Curves, Average Variable Costs Curves, Marginal Cost Curves, Total Fixed Costs Curves, Total Variable Costs Curves, and more. This test is a must for any student of AP Microeconomics. It offers a quick revision of the entire concept of Cost Curves.

Discussion

Adegbolu Abiola

in some competitive industry the long run total cost curve for every firm is given by , C(q) =A + q2 for q greaterthan 0 and C(0) = 0
where A is an annual lisencing fee imposed by the government. initially A = 100 and the industry is in the longrun competitive equilibrium with 100 firms
a) derive the supply functions for the firm and for the industSee more

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