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Questions and Answers
Which of the following is a determinant of short-run cost?
Which of the following is a determinant of short-run cost?
- Productivities of factors of production
- Time period
- Level of output (correct)
- Price of input factors
Which type of cost refers to the cost of attracting a resource from its next best alternative use?
Which type of cost refers to the cost of attracting a resource from its next best alternative use?
- Actual cost
- Sunk cost
- Opportunity cost (correct)
- Historical cost
Which of the following is a type of cost?
Which of the following is a type of cost?
- Output stability
- Laws of returns
- Lot size
- Controllable cost (correct)
What does Total Fixed Cost (TFC) represent?
What does Total Fixed Cost (TFC) represent?
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Which of the following is a determinant of economic cost?
Which of the following is a determinant of economic cost?
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Study Notes
Cost Determinants
- The price of a variable input is a determinant of short-run cost.
Types of Cost
- Opportunity cost refers to the cost of attracting a resource from its next best alternative use.
- Opportunity cost is a type of cost.
Total Fixed Cost (TFC)
- Total Fixed Cost (TFC) represents the cost of fixed inputs that do not vary with the level of output.
Economic Cost
- Opportunity cost is a determinant of economic cost.
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