24th Nov Theory of Cost Quiz – Punjab Meritorious School Preparation Portal

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Which of the following is true of the relationship between the marginal cost function and the average cost function?

If MC is greater than ATC, then ATC is falling.

The ATC curve intersects the MC curve at minimum MC.

The MC curve intersects the ATC curve at minimum ATC.

If MC is less than ATC, then ATC is increasing.

Which of the following statements is correct concerning the relationships among the firm's cost functions?

TC= TFC-TVC.

TVC=TFC-TC.

TFC=TC-TVC

TC= TVC-TFC.

Which of the following statements is true of the relationship among the average cost functions?

ATC = AFC - AVC.

AVC=AFC+ ATC.

AFC ATC + AVC.

AFC = ATC-AVC.

Which of the following is an example of "explicit cost"?

The wages a proprietor could have made by working as an employee of a large firm.

The income that could have been earned in alternative uses by the resources owned by the firm.

The payment of wages by the firm.

The normal profit earned by a firm

Marginal cost is defined as:

the change in total cost due to a one unit change in output.

total cost divided by output.

the change in output due to a one unit change in an input.

total product divided by the quantity of input.

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