Short-run and long-run costs - Jamb Economics Past Questions and Answers

Question 21:

• JAMB 2005

An example of a long-run cost of a firm is

A. Fuel and maintenace cost
B. The planned size of plant equipment
C. The existing size of plant and equipment
D. Rent on buildings

Question 22:

• JAMB 2006

A rising short-run average cost is a result of

A. Economies of scale
B. Falling marginal costs
C. Diminishing returns
D. Rising fixed costs

Question 23:

• JAMB 2006

If the short-run cost curve of a firm is U-shaped, the marginal and average cost are equal where the

A. Average variable cost is minimum
B. Marginal cost is falling
C. Average cost is minimum
D. Average fixed cost is falling

Question 24:

• JAMB 2007

A firm incurs short-run costs when

A. It cannot increase prices
B. Operation is at its later stages
C. Operation is at its early stages
D. Some inputs cannot be varied

Question 25:

• JAMB 2010

The rising portion of the long-run average cost curve of a firm is an indication that it is experiencing

A. Increasing efficiency
B. Economies of scale
C. Diseconomies of scale
D. Increasing marginal returns