MCQs of Economics – Average And Total Cost

Accounting profit is equal to total revenue minus:

Economic profit is equal to total revenue minus:

Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The accounting profit at Naila’s pottery factory is:

Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The economics profit at Naila’s pottery factory is:

If there are implicit costs of production

If a production function exhibits diminishing marginal product. its slope

If a production function exhibits diminishing marginal product the slope of the corresponding total-cost curve

Which of the following statements is true?

Which of the following is a variable cost in the short run?

When marginal costs are below average total costs,

If marginal costs equal average total costs,

If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will:

In the long run, if a very small factory were to expand its scale of operations it is likely that it would initially experience

The efficient scale of production is the quantity of output that minimizes: