Average cost - Jamb Economics Past Questions and Answers

Question 6:

• JAMB 1982

if AC = Average Cost of production ,
TC = Total Cost of production
VC = Variable Cost of production
FC = Fixed Cost of production
Q = Quantity of goods produced
Then,

A. AC = TC; TC = VC + FC
B. AC = (TC) Q: TC = VC + FC
C. AC = TC; TC = (VC)(FC) Q
D. AC = TC- FC: VC = TC- AC
E. AC = TC ; TC = VC + AC Q

Question 7:

• JAMB 1988

Which of the following is TRUE at the quantity of output where Average Cost (AC) per unit has reached its minimum level?

A. AVC=FC
B. MC=AVC
C. MC=AC
D. AC=AFC

Question 8:

• JAMB 1991

Consider the following diagram where XYZ represents the average curve of a firm. XY shows that as out put increases the average declines. However, this decline cannot continue indefinitely because

A. Managerial economies
B. Indivisibilities
C. The extent of the market
D. The pooling of dissimilar risks

Question 9:

• JAMB 1998

What is the average total cost when output is 200 units in the table above is

A. N1.00
B. N2.0
C. N1.20
D. N2.40

Question 10:

• JAMB 1999

The downward sloping part of the long-run average cost curve of a firm may be attributable to?

A. Diminishing returns
B. The law of variable proportions
C. Diseconomies of scale
D. Increasing returns to scale