Cost and Revenue Analysis MCQ Class 12 covers certain important topics, which are covered under syllabus for ISCE Class 12 and are coming in Term I examination for the academic year 2022-23. Cost and Revenue Analysis MCQ Class 12 Test contains 73 questions. MCQ on Economics Class 12 ISC have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Cost and Revenue Analysis MCQ Class 12
Basic concepts of cost
1.__________ refers to money expenses which the firm has to incur in purchasing or hiring factor service.
(a) Economic cost
(b) Factor cost
(c) Money cost
(d) None of the above
Answer
Answer: (c) Money cost
2. Money cost is also known as
(a) Accounting cost
(b) Business cost
(c) Explicit cost
(d) All of these
Answer
Answer: (d) All of these
3. Implicit cost is the estimated cost of self-employed resources .(True/False)
Answer
Answer: True
4._______ is defined as payment which a producer must get in order to induce him to undertake the risk involved in production.
(a) Normal profit
(b) Implicit cost
(c) Money cost
(d) Economic cost
Answer
Answer: (a) Normal profit
5. _______ refers to money payment made by the firm to the owners of various factor services in purchasing and hiring the factor services
(a) Normal profit
(b) Explicit cost
(c) Implicit cost
(d) None of the above
Answer
Answer: (b) Explicit cost
6. Normal profit is the maximum supply price of entrepreneurial services (True/False)
Answer
Answer: False
7. Economic cost is the total of both explicit and implicit cost, including normal profit.
(True/False).
Answer
Answer: True
8. Money cost is equal to
(a) Implicit cost
(b) Explicit cost
(c) Normal profit
(d) Economic cost
Answer
Answer: (b) Explicit cost
9. _______ is the cost of next best alternative good that is given up for the production of a particular good
(a) Opportunity cost
(b) Explicit cost
(c) Economic cost
(d) Money cost
Answer
Answer: (a) Opportunity cost
10. Opportunity cost arises due to;
(a) Scarcity of resources
(b) Alternative use of resources
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
Cost and Revenue Analysis MCQ Class 12
11. The opportunity cost of factors which are purchased or hired is measured by the price paid for these factor services.
(a) Implicit cost
(b) Explicit cost
(c) Money cost
(d) None of the above
Answer
Answer: (b) Explicit cost
12. Opportunity cost in the money terms is
(a) Economic cost
(b) Resources used
(c) Explicit cost
(d) Normal profit
Answer
Answer: (a) Economic cost
13. _______ refers to the efforts and sacrifices made by the owner of factors of production used in the production of a commodity
(a) Normal profit
(b) Economic cost
(c) Real cost
(d) None of the above
Answer
Answer: (c) Real cost
14. Real cost is the pain, sacrifice, discomfort and disutility involved in providing factor services. (True/False)
Answer
Answer: True
15. Private cost is a wider concept than social cost. (True/False)
Answer
Answer: False
16. Social cost is the sum of private and external cost.(True/False).
Answer
Answer: True
17. _______ is the cost that is not incurred by the firm but by other members of the society.
(a) Real cost
(b) Private cost
(c) Social cost
(d) External cost
Answer
Answer: (d) External cost
Cost and Revenue Analysis MCQ Class 12
Behaviour of cost in the short run
18. Theory of cost is concerned with the behaviour of cost in relation to the change in output (True/False)
Answer
Answer: True
19. Fixed factors depend upon the level of output (True/False)
Answer
Answer: False
20. _______ are the factors whose quantity can be easily changed in the short run.
(a) Variable factors
(b) Real factors
(c) Fixed factors
(d) Short run factors
Answer
Answer: (a) Variable factors
21. Which of the following are examples of variable factors
(a) Investment
(b) Raw material
(c) Labour
(d) All of the above
Answer
Answer: (d) All of the above
22. Fixed cost is incurred on
(a) Variable factors
(b) Fixed factors
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (b) Fixed factors
23. Which of the following is a fixed cost
(a) Salary of the permanent staff
(b) Interest on the borrowed capital
(c) Property tax
(d) All of the above
Answer
Answer: (d) All of the above
24. Which of the following is an example of variable cost
(a) Electricity expenses
(b) Excise duty
(c) Expenditure incurred on raw Material
(d) All of the above
Answer
Answer: (d) All of the above
25. ________ is the sum of fixed cost and variable cost.
(a) Long run cost
(b) Short run total cost
(c) Short run average cost
(d) None of the above
Answer
Answer: (b) Short run total cost
26. Fixed cost is also known as;
(a) Capital cost
(b) Avoidable cost
(c) Unavoidable cost
(d) None of the above
Answer
Answer: (c) Unavoidable cost
27. Fixed cost is also known as supplementary cost (True/False).
Answer
Answer: True
28. ________ is known as the cost refers to the total cost incurred by a firm on the use of variable factors.
(a) Variable cost
(b) Total variable cost
(c) Fixed cost
(d) Normal cost
Answer
Answer: (b) Total variable cost
29. Payment for fuel is a total variable cost (True/False).
Answer
Answer: True
30. Variable cost depends upon the level of ______.
(a) Output
(b) Cost
(c) Raw material
(d) None of the above
Answer
Answer: (a) Output
31. Variable cost is also known as
(a) Prime cost
(b) Direct cost
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
32. TVC curve looks like;
(a) Letter S
(b) Letter L
(c) Inverted S
(d) Inverted L
Answer
Answer: (c) Inverted S
33. When output is zero, TVC is _____.
(a) Zero
(b) One
(c) Negative
(d) None of the above
Answer
Answer: (a) Zero
34. Higher productivity implies
(a) Higher cost
(b) Lower output
(c) Lower cost
(d) Higher output
Answer
Answer: (c) Lower cost
Cost and Revenue Analysis MCQ Class 12
35.Initially,TVC increases at a ______
(a) Constant
(b) Diminishing
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (b) Diminishing
36. Average cost is the cost per unit of output (True/False)
Answer
Answer: True
37. Average fixed cost is the per unit cost of _______.
(a) Fixed cost
(b) Fixed factors
(c) Variable factors
(d) Fixed price
Answer
Answer: (b) Fixed factors
38. AFC curve touches the Y-Axis at point of zero output (True/False)
Answer
Answer: False
39. _______ is the per unit cost of the variable factors of production.
(a) Total variable cost
(b) Average variable cost
(c) Total fixed cost
(d) Average fixed cost
Answer
Answer: (b) Average variable cost
40. AVC curve is _____
(a) U shaped
(b) S shaped
(c) L shaped
(d) None of the above
Answer
Answer: (a) U shaped
41. AVC follows the law of ________
(a) Diminishing marginal utility
(b) Fixed proportions
(c) Variable proportions
(d) None of the above
Answer
Answer: (c) Variable proportions
42. The AVC curve is sloped ______ at the level of higher output and ________ at the level of lower output.
(a) Positive, negative
(b) Negative, positive
(c) Positive, constant
(d) Constant, negative
Answer
Answer: (a) Positive, negative
43. ATC = TC/Q (True/False)
Answer
Answer: True
44. ATC curve can be obtained by adding;
(a) TFC and AFC
(b) AFC and ATC
(c) AFC and TVC
(d) AFC and AVC
Answer
Answer: (d) AFC and AVC
45. ________ is known as the level of output at which average cost is minimum.
(a) Break even point
(b) Optimum point of production
(c) Variable proportion
(d) None of the above
Answer
Answer: (b) Optimum point of production
46. Marginal cost is directly related to fixed cost (True/False)
Answer
Answer: False
47. Marginal cost curve is _____ shaped
(a) Inverted U
(b) U
(c) S
(d) L
Answer
Answer: (b) U
48. When marginal cost is _______ than the average cost, the average cost falls with increase in output
(a) Less
(b) More
(c) Equal
(d) None of the above
Answer
Answer: (a) Less
49. When marginal cost is _____ than the average cost, the average cost must be rising.
(a) Less
(b) More
(c) Equal
(d) None of the above
Answer
Answer: (b) More
50. When MC =AC, average cost is constant (True/False)
Answer
Answer: True
51. When AC curve is U-Shaped, corresponding marginal cost curve will be
(a) U-shaped
(b) Constant
(c) S-shaped
(d) L-shaped
Answer
Answer: (a) U-shaped
Cost and Revenue Analysis MCQ Class 12
Long run cost curves
52. The ______ of a product is the least cost of producing each level of output when all the factors of production are variable.
(a) Total variable cost
(b) Average variable cost
(c) Short run cost
(d) Long run cost
Answer
Answer: (d) Long run cost
53. The shape of long run cost curve is
(a) L-shaped
(b) U-Shaped
(c) S-shaped
(d) Inverted S shaped
Answer
Answer: (d) Inverted S shaped
54. LMC is _______ shaped
(a) L
(b) S
(c) M
(d) U
Answer
Answer: (d) U
55. U-shape of the long run average cost curve is explained by
(a) Economies of scale
(b) Diseconomies of scale
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
56. _______ are the economies which arise from the expansion of the plant size or increase in the scale of production of the firm.
(a) Diseconomies
(b) Internal Economies
(c) External economies
(d) Economies
Answer
Answer: (b) Internal Economies
57. _______ diseconomies are experienced by a firm when it expands its scale of production beyond a point.
(a) Internal
(b) External
(c) Normal
(d) Above
Answer
Answer: (a) Internal
58. Internal diseconomies can be seen in the form of;
(a) Labour inefficiency
(b) Managerial and technological diseconomies
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
59. External economies are shared by all the firms in the industry. (True/False)
Answer
Answer: True
60. _____ arise as a result of expansion in the industry as a whole.
(a) Internal Economies
(b) External economies
(c) Internal diseconomies
(d) External diseconomies
Answer
Answer: (b) External economies
Revenue concepts
61. Revenue are the receipts by a firm from the sale of its output in a given period (True/False)
Answer
Answer: True
62. _______ refers to the total amount of income received by the firm from selling a given amount of its output.
(a) Average revenue
(b) Total revenue
(c) Total fixed revenue
(d) Marginal revenue
Answer
Answer: (b) Total revenue
63. Total revenue is the product of price of a commodity and output sold (True/False)
Answer
Answer: True
Cost and Revenue Analysis MCQ Class 12
64. Total revenue depends upon_____
(a) Output
(b) Price
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
65. MR = ∆TR/∆Q (True/False)
Answer
Answer: True
66. Average revenue is ______ at all levels of output
(a) Constant
(b) More than Marginal revenue
(c) Less than Marginal revenue
(d) Equal to total revenue
Answer
Answer: (a) Constant
67. AR is a ________ line
(a) Upward sloping
(b) Downward sloping
(c) Vertical
(d) Horizontal
Answer
Answer: (d) Horizontal
68. Which of the following statements about TR curve are true;
(a) Positively sloped
(b) Straight line
(c) Starts from origin
(d) All of the above
Answer
Answer: (d) All of the above
69. TR is constant due to the constant AR. (True/False)
Answer
Answer: False
70. AR can be zero (True/False)
Answer
Answer: False
71. When total revenue is maximum, marginal revenue is _____.
(a) Maximum
(b) Zero
(c) One
(d) Negative
Answer
Answer: (b) Zero
72. When total revenue falls, Marginal revenue is ______.
(a) Negative
(b) Positive
(c) Zero
(d) One
Answer
Answer: (a) Negative
73. Which of the following shows the significance of revenue curves.
(a) Determines equilibrium
(b) Estimate profits and losses
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
Economics Class 12 ISC MCQs – Term 1
- Demand and Law of Demand MCQ Class 12
- Theory of Consumer Behaviour Class 12 MCQ
- Elasticity of Demand
- Supply – Law of Supply and Price Elasticity of Supply
- Market Mechanism
- Law of Returns
- Cost and Revenue Analysis
- Forms of Market
- Producer’s Equilibrium
- Determination of Equilibrium Price and Output under Perfect Competition