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Class 11 Economics MCQ Chapter 7 Concept of costs
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Concept of costs
Chapter: 7
| PART – A : MICROECONOMICS |
Choose the Correct Option:
1. When ATC, AVC, and MC fall and then rise, their shape is:
(a) Linear.
(b) U-shaped.
(c) V-shaped.
(d) Constant.
Ans: (b) U-shaped.
2. The MC curve cuts ATC and AVC at:
(a) Their maximum points.
(b) Zero points.
(c) Minimum points.
(d) Midpoints.
Ans: (c) Minimum points.
3. If MC < AC, then:
(a) AC is rising.
(b) AC is falling.
(c) AC is constant.
(d) AVC is zero.
Ans: (b) AC is falling.
4. When MC rises above AC, then:
(a) AC falls.
(b) AVC falls.
(c) AC rises.
(d) AVC constant.
Ans: (c) AC rises.
5. U-shape of cost curves is due to:
(a) Law of demand.
(b) Law of diminishing returns.
(c) Law of supply.
(d) Opportunity cost.
Ans: (b) Law of diminishing returns.
6. In the diagram, MC intersects AVC at point:
(a) A.
(b) B.
(c) C.
(d) O.
Ans: (b) B.
7. AC is calculated as:
(a) TC × Q.
(b) TC + Q.
(c) TC / Q.
(d) Q / TC.
Ans: (c) TC / Q.
8. AVC is equal to:
(a) VC / Q.
(b) TC / Q.
(c) FC / Q.
(d) QVC.
Ans: (a) VC / Q.
9. If AVC and ATC are falling, then:
(a) MC > ATC.
(b) MC < ATC.
(c) MC = AVC.
(d) MC = ATC.
Ans: (b) MC < ATC.
10. Which curve lies lowest in the diagram initially?
(a) ATC.
(b) AVC.
(c) MC.
(d) AC.
Ans: (c) MC.
11. Cost of production means:
(a) Cost to consumers.
(b) Cost of advertising.
(c) Cost of inputs used.
(d) Cost of storage.
Ans: (c) Cost of inputs used.
12. Explicit costs are:
(a) Imputed costs.
(b) Recorded in books.
(c) Unrecorded costs.
(d) Internal costs only.
Ans: (b) Recorded in books.
13. Economic cost =
(a) Only explicit cost.
(b) Implicit cost – explicit cost.
(c) Explicit + implicit cost.
(d) Total revenue.
Ans: (c) Explicit + implicit cost.
14. Cost paid to outsiders for inputs is called:
(a) Opportunity cost.
(b) Implicit cost.
(c) Economic cost.
(d) Explicit cost.
Ans: (d) Explicit cost.
15. Cost function expresses relation between:
(a) Inputs and profit.
(b) Cost and output.
(c) Output and price.
(d) Output and revenue.
Ans: (b) Cost and output.
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