Lesson 4.1.4.4

4.1.4.4 Costs of production Quiz: AQA Economics, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.1.4.4, Costs of production: 20 multiple choice questions for the AQA Economics (7136), Unit 1: Individuals, firms, markets and market failure, written with Revision Ninja.

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The 20 questions

  1. Which costs do not change when output changes in the short run?

    • Average costs
    • Variable costs
    • Marginal costs
    • Fixed costs

  2. Which costs change directly with the level of output produced?

    • Overhead costs
    • Fixed costs
    • Variable costs
    • Sunk costs

  3. A firm has total fixed costs of £100 and total variable costs of £150 at an output of 10 units. What is total cost?

    • £100.
    • £250.
    • £150.
    • £15.

  4. A firm has total fixed costs of £100 and total variable costs of £150 at 10 units. What is average total cost at 10 units?

    • £15.
    • £250.
    • £25.
    • £10.

  5. A firm has total fixed costs of £100 at every level of output. What is average fixed cost at 10 units?

    • £100.
    • £25.
    • £10.
    • £15.

  6. The firm's total cost rises from £250 at 10 units to £275 at 11 units. What is marginal cost?

    • £25.
    • £275.
    • £15.
    • £2.50.

  7. Which formula is used to calculate average variable cost?

    • MC / output
    • TVC / output
    • TC / output
    • TFC / output

  8. What is defined as the addition to total cost from producing one extra unit?

    • Average cost
    • Marginal cost
    • Variable cost
    • Fixed cost

  9. In the short run, which cost is unaffected by changes in output?

    • Marginal cost.
    • Average variable cost.
    • Variable cost.
    • Fixed cost.

  10. Why does average fixed cost fall continuously as output increases?

    • Diminishing marginal returns
    • Increasing variable costs
    • Diseconomies of scale
    • Spreading fixed costs

  11. What causes average variable cost to fall initially as output rises?

    • Diseconomies of scale
    • Diminishing marginal returns
    • Rising fixed costs
    • Increasing marginal returns

  12. What causes the short-run average total cost curve to be U-shaped?

    • Diminishing marginal returns
    • Falling fixed costs
    • Constant total costs
    • Economies of scale

  13. At what point does the marginal cost curve intersect the average total cost curve?

    • Maximum ATC
    • Minimum ATC
    • Maximum AVC
    • Minimum AFC

  14. Costs for a firm: output 1: TVC 60; 2: TVC 110; 3: TVC 150; with TFC of £100. What is the marginal cost of the third unit?

    • £50.
    • £150.
    • £60.
    • £40.

  15. A firm has total fixed costs of £100 and total variable costs of £150 at 3 units of output. What is its average total cost?

    • £250.
    • £50.
    • About £83.33.
    • £33.33.

  16. Why can long-run average costs be lower than short-run average costs?

    • Scale is restricted
    • All factors fixed
    • All factors variable
    • Diminishing returns apply

  17. How is a firm most likely to respond to an increase in wage rates?

    • Substitute capital
    • Substitute labour
    • Reduce capital
    • Increase hiring

  18. An increase in raw material prices will shift which cost curve upwards?

    • Average variable cost
    • Average fixed cost
    • Long-run fixed cost
    • Total fixed cost

  19. What is the primary goal that often leads firms to ignore minimum average cost?

    • Cost minimisation
    • Profit maximisation
    • Revenue minimisation
    • Output minimisation

  20. What key feature distinguishes short-run production from long-run production?

    • Sunk costs
    • Constant returns
    • Variable costs
    • Fixed factors

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