JAMB and WAEC Economics questions: Theory of costs and revenue

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

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

   A firm earns normal profit when

   • Atotal revenue equals total cost including opportunity cost
   • Bprice is above average cost
   • Cmarginal revenue is zero
   • Dit makes a loss

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2. Question 2· 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

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3. Question 3· 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

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4. Question 4· 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

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

   Which of the following is a fixed cost to a factory?

   • Arent on the factory building
   • Braw materials
   • Celectricity used by machines
   • Dwages of casual workers

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

   Costs that change as output changes are called

   • Avariable costs
   • Bfixed costs
   • Csunk costs
   • Doverhead costs

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7. Question 7· 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

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

   Total cost is ₦9,000 when output is 300 and total fixed cost is ₦6,000. Average variable cost is

   • A₦20
   • B₦30
   • C₦10
   • D₦3,000

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9. Question 9· 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

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

    A profit-maximising firm produces where

    • Aaverage cost is lowest
    • Bmarginal cost equals marginal revenue
    • Ctotal revenue is highest
    • Dprice is highest

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

    For a firm in perfect competition, average revenue is equal to

    • Azero
    • Btotal cost
    • Cthe price of the product
    • Dfixed cost

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12. Question 12· 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

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13. Question 13· 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

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14. Question 14· 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

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

    Rent paid on a factory building is an example of

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

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

    Average revenue is equal to

    • Aprofit
    • Btotal cost
    • Cmarginal cost
    • Dprice

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17. Question 17· 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

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18. Question 18· Theory of costs and revenue· JAMB

    Average fixed cost

    • Ais zero
    • Brises with output
    • Cis constant
    • Dfalls continuously as output rises

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19. Question 19· Theory of costs and revenue· JAMB

    The long-run average cost curve is typically

    • Avertical
    • Bstraight horizontal
    • CU-shaped
    • Dupward sloping only

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20. Question 20· Theory of costs and revenue· JAMB

    A firm's total cost of producing 50 units is ₦500. Find the average cost.

    • A₦25,000
    • B₦10
    • C₦50
    • D₦450

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    Explanation and discussion