1. Variable costs are
a. costs that vary with output
b. not important in decision making
c. costs that do not vary with output
d. equal to total costs
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
2. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total variable
costs equal
a. $125Million
b. $45Million
c. $1Million
d. $170Million
ANSWER: d
TOPICS: Section 1: Background: Variable, fixed and Total Costs
3. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total fixed costs
equal
a. $250,000
b. $50,000
c. $20,500
d. $30,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
,4. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total costs equal
a. $125,250,000
b. $170,250,000
c. $125,050,000
d. $170,050,000
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
5. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s fixed costs?
a. $9,000
b. $10,000
c. $11,000
d. $12,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
6. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s total variable
costs?
a. $1000
b. $3000
c. $5,000
d. $7,000
ANSWER: b
,TOPICS: Section 1: Background: Variable, fixed and Total Costs
7. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s total costs?
a. $10,000
b. $11,000
c. $12,000
d. $13,000
ANSWER: c
TOPICS: Section 1: Background: Variable, fixed and Total Costs
8. Fixed costs are
a. costs that vary with output
b. always equal to marginal costs
c. costs that do not vary with output
d. equal to total costs
ANSWER: c
TOPICS: Section 1: Background: Variable, fixed and Total Costs
9. In the short-run:
a. All inputs are variable
b. Some inputs are fixed and some inputs are variable
c. There are no fixed inputs
d. The firm is not restricted in how much it can produce
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
, 10. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total variable costs
equals
a. $5,000
b. $8,000
c. $13,000
d. $10,000
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
11. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total fixed costs equals
a. $5,000
b. $8,000
c. $13,000
d. $3,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
12. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total costs equals
a. $5,000
b. $8,000
c. $13,000
d. $3,000
ANSWER: c
a. costs that vary with output
b. not important in decision making
c. costs that do not vary with output
d. equal to total costs
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
2. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total variable
costs equal
a. $125Million
b. $45Million
c. $1Million
d. $170Million
ANSWER: d
TOPICS: Section 1: Background: Variable, fixed and Total Costs
3. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total fixed costs
equal
a. $250,000
b. $50,000
c. $20,500
d. $30,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
,4. A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and
rent $250,000/month. If the firm produces 1,000,000 units a month, the total costs equal
a. $125,250,000
b. $170,250,000
c. $125,050,000
d. $170,050,000
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
5. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s fixed costs?
a. $9,000
b. $10,000
c. $11,000
d. $12,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
6. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s total variable
costs?
a. $1000
b. $3000
c. $5,000
d. $7,000
ANSWER: b
,TOPICS: Section 1: Background: Variable, fixed and Total Costs
7. Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit
and the firm is making an accounting profit of $3000. What is the firm’s total costs?
a. $10,000
b. $11,000
c. $12,000
d. $13,000
ANSWER: c
TOPICS: Section 1: Background: Variable, fixed and Total Costs
8. Fixed costs are
a. costs that vary with output
b. always equal to marginal costs
c. costs that do not vary with output
d. equal to total costs
ANSWER: c
TOPICS: Section 1: Background: Variable, fixed and Total Costs
9. In the short-run:
a. All inputs are variable
b. Some inputs are fixed and some inputs are variable
c. There are no fixed inputs
d. The firm is not restricted in how much it can produce
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
, 10. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total variable costs
equals
a. $5,000
b. $8,000
c. $13,000
d. $10,000
ANSWER: b
TOPICS: Section 1: Background: Variable, fixed and Total Costs
11. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total fixed costs equals
a. $5,000
b. $8,000
c. $13,000
d. $3,000
ANSWER: a
TOPICS: Section 1: Background: Variable, fixed and Total Costs
12. A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and
rent $5000/month. If the firm produces 1000 units a month, the total costs equals
a. $5,000
b. $8,000
c. $13,000
d. $3,000
ANSWER: c
