Lesson 3.2.1

3.2.1 Fixed, variable, total, average and marginal costs; short and long run Quiz: OCR Economics, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.2.1, Fixed, variable, total, average and marginal costs; short and long run: 20 multiple choice questions for the OCR Economics (H460), Unit 3: Business objectives, written with Revision Ninja.

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The 20 questions

  1. What characterises the short run in economic production theory?

    • One fixed factor
    • Changing technology
    • No fixed costs
    • All factors variable

  2. What characterises the long run period for a firm?

    • All factors fixed
    • One fixed factor
    • Constant technology
    • All factors variable

  3. Which type of cost does not change when output changes in the short run?

    • Average cost
    • Marginal cost
    • Fixed cost
    • Variable cost

  4. Which of the following is typically classified as a fixed cost for a bakery?

    • Hourly baker wages
    • Flour purchases
    • Packaging materials
    • Factory rent

  5. What happens to Average Fixed Cost as output increases?

    • Continually rises
    • Continually falls
    • Remains constant
    • Forms U-shape

  6. A firm has fixed costs of £500 and variable costs of £300. What is Total Cost?

    • £800
    • £1,500
    • £200
    • £500

  7. What is the cost of producing one additional unit of output called?

    • Average cost
    • Marginal cost
    • Total cost
    • Variable cost

  8. Where does the Marginal Cost curve intersect the Average Cost curve?

    • At vertical axis
    • At the origin
    • At minimum AC
    • At maximum AC

  9. A firm produces 100 units at a Total Cost of £2,000. What is Average Cost?

    • £20
    • £2
    • £20,000
    • £200

  10. Total cost rises from £1,000 to £1,250 when output increases from 10 to 15 units. What is Marginal Cost?

    • £12.50
    • £25
    • £50
    • £250

  11. Which law explains the eventual increase in short-run marginal costs as output expands?

    • Diminishing utility
    • Supply and demand
    • Increasing returns
    • Diminishing returns

  12. A firm produces 50 units with an Average Variable Cost of £4. What is Total Variable Cost?

    • £54
    • £12.50
    • £200
    • £125

  13. What is the relationship between Marginal Cost and Average Cost when Average Cost is falling?

    • MC above AC
    • MC below AC
    • MC equals AC
    • MC is zero

  14. Which cost directly increases as a car manufacturer produces more vehicles?

    • Managerial salaries
    • Steel components
    • Annual lease
    • Factory insurance

  15. Which mathematical expression correctly calculates a firm's Average Total Cost?

    • AFC + AVC
    • TFC + TVC
    • AFC - AVC
    • MC + AVC

  16. What is assumed to be variable in the very long run that is fixed in the long run?

    • Labour inputs
    • Output levels
    • Technological state
    • Raw material costs

  17. If Total Fixed Costs are £1,200 and output is 300 units, what is Average Fixed Cost?

    • £4
    • £360
    • £40
    • £0.25

  18. What geometric shape best describes the Average Fixed Cost curve?

    • Rectangular hyperbola
    • Vertical line
    • Horizontal line
    • U-shape

  19. If a firm's business rates rise, which cost curve shifts upwards while Marginal Cost remains unchanged?

    • Marginal cost
    • Average variable cost
    • Total variable cost
    • Average total cost

  20. If Average Cost is £15 and a firm produces 40 units, what is Total Cost?

    • £55
    • £2.67
    • £2,400
    • £600

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