Average costs, variable costs, fixed costs, total costs

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  • Created by: Jade
  • Created on: 17-11-12 14:20

1. What are variable costs?

  • The total cost of production or provision of a service
  • Costs that vary directly with output produced e.g. labour, fuel, raw material costs
  • Costs that are independent of output produced e.g rent, interest paid on loans
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Other questions in this quiz

2. What is the equation for total cost?

  • Total cost = Fixed cost + Variable cost
  • Total cost = Fixed cost/ Variable cost
  • Total cost = Variable cost/Fixed cost

3. On typical short run cost curves, which cost curve runs through the lowest point of both average variable cost curve and average cost curve?

  • Average total cost curve
  • Marginal cost curve
  • Average fixed cost curve

4. What is average cost and the equation?

  • Average cost is the unit cost of production. Average cost = Total cost/quantity
  • Average cost is the change in total cost that occurs when output is changed by one unit. Average cost = Quantity/total cost
  • Average cost is the unit cost of production. Average cost = Total cost x quantity

5. What is marginal cost?

  • Marginal cost is the change in total cost that occurs when output is changed by one unit.
  • Marginal cost is the unit cost of production.
  • Marginal cost are costs that vary directly with output produced.

Comments

davidsalter

10 questions on costs that can provide a break from more intensive studying.

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