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6. 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.

7. What are costs?

  • The monetary value of inputs that are needed to produce a particular good or service
  • The value of inputs that are needed to produce a good
  • The revenue from inputs that are needed to produce a good or service

8. In air transport, a substantial fixed cost item is the annual sum that has to be paid to?

  • Lease passengers
  • Lease aircraft
  • Lease airports

9. What are fixed costs?

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

10. The lowest level of output where LRAC is minimised is known as what?

  • Moderate efficiency scale
  • Minimum efficiency scale
  • Maximum efficiency scale

11. What is average cost and the equation?

  • Average cost is the unit cost of production. Average cost = Total cost x quantity
  • 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

12. What is the total cost?

  • The total cost of production or provision of a service
  • The total cost of production of a service
  • The total cost of provision of a service

13. What are variable costs?

  • 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
  • The total cost of production or provision of a service

14. Where aircraft are owned by the airline, this is the cost of what?

  • Any debt
  • Any loaned finance and also depreciation
  • Any loaned finance