Table of Contents

ISC ECONOMICS 12 Cost MCQs with Solved Answers

ISC ECONOMICS 12 Cost MCQs with Solved Answers (Question 1 to 5)

1.Expenditure incurred on various inputs to produce goods and services is called…
(a) Cost of production
(b) Revenue
(c) Fixed Cost
(d) Variable Cost
2.Function refers to the functional relationship between cost and output….
(a) Demand Function
(b) Supply Function
(c) Cost Function
(d) Revenue Function

3. Actual payment made on hired factors of production is called…
(a) Implicit Cost
(b) Explicit Cost
(c) Fixed Cost
(d) Variable Cost

4.Cost incurred on the self – owned factors of production is called…
(a) Implicit Cost
(b) Explicit Cost
(c) Fixed Cost
(d) Variable Cost

5. Those costs do not vary directly with the change in the level of output is called…
(a) Implicit Cost
(b) Explicit Cost
(c) Total Fixed Cost
(d) Variable Cost

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ISC ECONOMICS 12 Cost MCQs with Solved Answers (Question 6 to10)

6. Total Fixed Costs is also called…
(a) Overhead cost
(b) Supplementary cost
(c) Indirect cost
(d) unavoidable cost
(e) All of these

7. Those costs vary directly with the change in the level of output is called…
(a) Implicit Costs
(b) Explicit Costs
(c) Total Fixed Costs
(d) Total Variable Costs

8. Costs are present even when the output is zero is called…
(a) Implicit Cost
(b) Explicit Cost
(c) Total Fixed Cost
(d) Total Variable Cost

9. Total Variable Costs are also called
(a) Prime costs
(b) Avoidable costs
(c) Direct costs
(d) All of these
10. Costs are zero when output is zero……
(a) Implicit Cost
(b) Explicit Cost
(c) Total Variable Cost
(d) Total Fixed Cost

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ISC ECONOMICS 12 Cost MCQs with Solved Answers (Question 11 to 15)

11.Cost of exertion, pains and sacrifices is known as:
(a) Opportunity costs
(b) Production costs
(c) Real costs
(d) Explicit Costs
12. Salary and Wages paid to Workers is an example of:
(a) Explicit Cost
(b) Implicit Cost
(c) Opportunity Cost
(d) None of these

13. When production level is zero, then fixed cost is:
(a) Zero
(b) Negative
(c) Positive
(d) Equal to variable cost

14. Which of the following indicates fixed cost?
(a) Electricity Bills
(b) Expenses on raw material
(c) Wages of Daily Workers
(d) Interest on Fixed Capital

15. Total cost can be calculated as :
(a) TFC+TVC
(b) TFC-TVC
(c) TFC=TVC
(d) None of these

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Note: Answers are given below at the end.

ISC ECONOMICS 12 Cost MCQs with Solved Answers (Question 16 to 20)

16. Which of the following statement is incorrect?
(a)TFC is horizontal to x-axis.
(b) TC and TVC are S shaped (they rise initially at a decreasing rate, then at a constant rate & finally at an increasing rate) due to law of variable proportions.
(c) At zero level of output TC is equal to TFC.
(d) TC and TVC curves parallel to each other.
(e) None of These

17. Total Cost increases at an increasing rate when Marginal cost is
(a) Constant
(b) Increasing
(c) Decreasing
(d) Negative

18. Which of the following statement is correct?

(a) When MC is falling, TC/TVC increases at a diminishing rate.
(b) When MC is minimum, TC/TVC stops increasing at a diminishing rate.
(c) When MC is rising, TC/TVC increases at an increasing rate.
(d) All Of these

19. Which of the following statement is correct?

(a) When MC curve lies below AVC curve, AVC decreases.

(b) When MC curve lies above AVC curve, AVC increases.

(d) The lowest point of MC comes before the lowest point of AVC.
(e) All of these

20. Variable cost per unit of output is known as
(a) AVC
(b) TVC
(c) TV
(d) None of these

21. What is the correct formula for calculating the Total variable cost?
(a) TVC = ∑MC
(b) TVC = TC – TFC
(c) TVC = AVC x Q
(d) All of these

ISC ECONOMICS 12 Elasticity of Demand MCQs with Solved Answers

Note: Answers are given below at the end.

Answer – Question Number 1To 5

1.Answer – (a) Cost of production

2.Answer – (c) Cost Function

3.Answer – (b) Explicit Cost

4.Answer – (a) Implicit Cost

5.Answer – (c) Total Fixed Cost

Answer – Question Number 6 To 10

6. Answer – (e) All of these

7. Answer – (d) Total Variable Costs

8. Answer – (c) Total Fixed Cost

9. Answer – (d) All of these

10. Answer -(c) Total Variable Cost

Answer – Question Number 11 To 15

11.Answer – (b) (c) Real costs

12.Answer – (a) Explicit Cost

13.Answer – (c) Positive

14.Answer – (d) Interest on Fixed Capital

15.Answer – (a) TFC+TVC

Answer – Question Number 16 To 20

16. Answer – (e) None of These

17.Answer – (b) Increasing

18. Answer – (d) All Of these

19. Answer – (e) All Of these

20.Answer – (a) AVC

21. Answer – (d) All of these

ISC ECONOMICS 12 Cost MCQs with Solved Answers