Q4 of 38 Page 1

If the average fixed cost of producing 4 units of output is < 60, then thevalue of total fixed cost for producing 5 units will be _____________ . (Fill up the blank)

OR


State any two examples of variable cost.


Average fixed cost is 60

Quantity is 4


Total fixed cost = AFC * Quantity


TFC = 60 * 4 = 120


Now, TFC is 120.


OR


Variable cost is the cost incurred on the variable factors of production. It varies directly with the increase in production. It is zero when the output is zero. It is also called prime cost and direct cost. The two examples of variable cost of raw material and the labour employed in the production.


More from this chapter

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2

The marginal product curve in the input-output plane looks like ____________ : (Choose the correct alternative)

 3

If the percentage change in quantity supplied of commodity X is more

then the percentage change in the price of the commodity X, the coefficient


of price elasticity of supply would be _______________ : (Choose the correct alternative)


 5

Explain briefly the central problem of ‘‘What to produce’’.

 6

A rational consumer is consuming only two goods, Good X and Good Y with < 4 and < 5 as their respective prices. Her total money income is < 40. Answer the following questions, based on the given information :

(a) State the consumer’s budget line equation.


(b) What would be the slope of the budget line?