Cost Concepts: AP Microeconomics Online Test

The Prime Cost can be categorised as:
Opportunity cost
Fixed cost
Variable cost
Sunk cost
None of the above
For a factor of production, the opportunity cost is:
The amount that the factor earns in the long period
The amount that the factor earns in some other use
The amount that the factor earns in the present use
The amount to be paid to the factor to keep it in its present use
All of the above
Explicit costs are also known as: I Outlay costs II Absolute costs III Actual costs IV Transferred earnings
I only
II only
I and II
I, II and III
II and IV
Which of the following can be termed as an Implicit Cost of Production?
Raw material costs
Wages of labour
Interest on own money capital
Floor manager’s salary
Electricity and fuel charges of the plant
Total Fixed Costs are also known as: a) Absolute costs b) Indirect costs c) Supplementary costs d) Direct costs
I only
II only
III only
III and IV
II and III
Variable costs are equal to:
Capital costs
Capital costs and Operating costs
Capital costs and Spill-over costs
Operating costs
Operating costs and Spill-over costs
Which of the following could be used for Opportunity costs? I Alternative costs II Transferred Earnings III Spill over Costs
I only
II only
III only
I and II
II and III
Implicit costs are:
Costs of government resources
Costs of resources provided by small industries
Costs of resources provided by households
Costs of resources owned by the firm
External costs not incurred by the firm
Which of the following is not a fixed cost?
Wages of labour
Rent
Licence fees
Depreciation
Salary of administrative staff
Which of the following is not a Variable cost?
Wages of labour
Depreciation
Electricity charges
Raw material purchased
Wear and tear expenses
Description:

Costs, is of various types. Be it Explicit or Implicit Costs, Fixed or Variable; as a student of Microeconomics AP, you must know their meanings and application. Here is a 7-minute short test on the basic Cost Concepts. You’ll find Multiple Choice questions on the basics of the major kinds of Costs.

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