Cost and Revenue Analysis MCQ Class 12

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

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