WAEC Economics questions: Theory of costs and revenue

16 questions with answers and explanations. Tap an option to check yourself.

1. Question 1· Theory of costs and revenue· WAEC

   A bakery has fixed costs of ₦50,000 and a variable cost of ₦200 per loaf. What is the total cost of 300 loaves?

   • A₦110,000
   • B₦60,000
   • C₦50,200
   • D₦160,000

   Show answer

   Explanation and discussion

2. Question 2· Theory of costs and revenue· WAEC

   Costs that do not change with the level of output are

   • Afixed costs
   • Bvariable costs
   • Cmarginal costs
   • Daverage costs

   Show answer

   Explanation and discussion

3. Question 3· Theory of costs and revenue· WAEC

   Which of these is a variable cost to a factory?

   • Ainsurance premium
   • Brent of the building
   • Ccost of raw materials
   • Dthe manager's salary

   Show answer

   Explanation and discussion

4. Question 4· Theory of costs and revenue· WAEC

   Marginal cost is

   • Athe addition to total cost from producing one more unit
   • Btotal cost divided by output
   • Cfixed cost per unit
   • Dtotal revenue minus total cost

   Show answer

   Explanation and discussion

5. Question 5· Theory of costs and revenue· WAEC

   A firm sells 50 units at ₦400 each. What is its total revenue?

   • A₦20,000
   • B₦8
   • C₦450
   • D₦2,000

   Show answer

   Explanation and discussion

6. Question 6· Theory of costs and revenue· WAEC

   A firm's total cost is ₦5,000 for 10 units and ₦5,450 for 11 units. Find the marginal cost of the 11th unit.

   • A₦500
   • B₦495.45
   • C₦5,450
   • D₦450

   Show answer

   Explanation and discussion

7. Question 7· Theory of costs and revenue· WAEC

   A firm's total cost rises from ₦500 to ₦560 when output rises from 10 to 11 units. Its marginal cost is

   • A₦50.91
   • B₦560
   • C₦60
   • D₦1,060

   Show answer

   Explanation and discussion

8. Question 8· Theory of costs and revenue· WAEC

   If a firm's total cost of producing 10 units is ₦500 and of producing 11 units is ₦540, the marginal cost of the 11th unit is

   • A₦50
   • B₦49
   • C₦40
   • D₦540

   Show answer

   Explanation and discussion

9. Question 9· Theory of costs and revenue· WAEC

   Rent paid on a factory building is an example of

   • Amarginal cost
   • Bvariable cost
   • Cfixed cost
   • Dopportunity cost

   Show answer

   Explanation and discussion

10. Question 10· Theory of costs and revenue· WAEC

    Total cost rises from ₦12,000 to ₦12,800 when output increases from 40 to 50 units. The marginal cost per unit is

    • A₦80
    • B₦800
    • C₦256
    • D₦300

    Show answer

    Explanation and discussion

11. Question 11· Theory of costs and revenue· WAEC

    A firm's fixed cost is ₦5,000 and variable cost for 100 units is ₦15,000. The average total cost is

    • A₦200
    • B₦150
    • C₦50
    • D₦20,000

    Show answer

    Explanation and discussion

12. Question 12· Theory of costs and revenue· WAEC

    The rent a bakery pays for its shop, whatever the number of loaves baked, is a

    • Amarginal cost
    • Bvariable cost
    • Cfixed cost
    • Dopportunity cost

    Show answer

    Explanation and discussion

13. Question 13· Theory of costs and revenue· WAEC

    Total revenue is calculated as

    • Aprice ÷ quantity
    • Bcost × quantity
    • Cprofit ÷ cost
    • Dprice × quantity sold

    Show answer

    Explanation and discussion

14. Question 14· Theory of costs and revenue· WAEC

    A firm's total revenue is ₦1,200 when it sells 40 units. Its average revenue is

    • A₦20
    • B₦40
    • C₦30
    • D₦48

    Show answer

    Explanation and discussion

15. Question 15· Theory of costs and revenue· WAEC

    In the short run a firm will continue production as long as price covers

    • Amarginal revenue
    • Baverage total cost
    • Cfixed cost only
    • Daverage variable cost

    Show answer

    Explanation and discussion

16. Question 16· Theory of costs and revenue· WAEC

    A firm sells 50 units at ₦40 each. Its total revenue is

    • A₦2,000
    • B₦90
    • C₦1,250
    • D₦200

    Show answer

    Explanation and discussion