This quiz works best with JavaScript enabled. Home > Finance > Profit > Profit – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Profit Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A firm currently produces 100 units of output and has fixed cost of $ 1000, variable cost of $ 8000, and the marginal cost of $ 100 for the 100th unit. What is the average total cost of producing 100 units? A) 90. B) 70. C) 100. D) 91. Show Answer Correct Answer: A) 90. 2. Market Share is the amount of profit a company makes compared to its competitors. A) True. B) False. C) Not sure. D) None of above. Show Answer Correct Answer: B) False. 3. When you buy these, you are buying ownership in a company. The goal is to buy low and sell high. A) Commodity. B) Bond. C) Stock. D) Savings Account. Show Answer Correct Answer: C) Stock. 4. Producers often work to maximize their ..... and make them as large as possible. A) Debts. B) Ptofit. C) Expenses. D) Cost. Show Answer Correct Answer: B) Ptofit. 5. A ..... profit is the minimum level of economic profit a company needs to stay in business. A) Normal. B) Excess. C) Baseline. D) Reduced. Show Answer Correct Answer: A) Normal. 6. A firm has total production cost of $ 200, 000. Its average fixed cost is $ 120 and its average variable cost is $ 80. What are the firm's total fixed costs? A) 12, 000. B) 40, 000. C) 80, 000. D) 120, 000. Show Answer Correct Answer: D) 120, 000. 7. Because a perfectly competitive firm is a price-taker, its short-run demand curve is A) Perfectly elastic. B) Perfectly inelastic. C) Equal to its average total cost curve. D) Downward-sloping. Show Answer Correct Answer: A) Perfectly elastic. 8. Which of the following is true of investments? A) Higher risk = lower return. B) Lower risk = higher return. C) Higher risk = higher return. D) They are a bad idea. Show Answer Correct Answer: C) Higher risk = higher return. 9. O calculate profit, producers subtract their total production cost from their A) Total Revenue. B) Marginal Revenue. C) Marginal Cost. D) Total Units Produced. Show Answer Correct Answer: A) Total Revenue. 10. SUPERNORMAL PROFIT occurs when TR > TC A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 11. Evan earned $ 300 by doing yard work. His profit was $ 250. How much were his expenses? A) $ 550. B) $ 300. C) $ 250. D) $ 50. Show Answer Correct Answer: D) $ 50. 12. Normal Profit is when A) TR = TC. B) TR = TVC. C) Economic Profit > 0. D) MR > MC. Show Answer Correct Answer: A) TR = TC. 13. A firm is producing 100 units of output at a total cost of $ 400. The firm's average variable cost is $ 3 per unit. What is the firm's total fixed cost? A) $ 100. B) $ 1. C) $ 300. D) $ 50. Show Answer Correct Answer: A) $ 100. 14. Profit is Maximised when Marginal Cost = Marginal Revenue A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 15. Which of the following statement is true about the relationship between MC and AVC? A) If MC < ATC, then ATC is minimised. B) If MC = ATC, then ATC is at maximum. C) If MC > ATC, then MC is decreasing. D) If MC < ATC, then ATC is decreasing. Show Answer Correct Answer: D) If MC < ATC, then ATC is decreasing. 16. Which is the odd one out? A) Revenue. B) Turnover. C) Income. D) Profit. Show Answer Correct Answer: D) Profit. 17. What cannot be changed in the short run? A) The level of stock held by firms. B) The level of technology available. C) Market price of goods. D) The output of individual firms in an industry. Show Answer Correct Answer: B) The level of technology available. 18. At 100 units of output, a firm's total cost is $ 10, 000. If the firm's total fixed cost is $ 4, 000, its average variable cost is equal to: A) $ 140. B) $ 100. C) $ 60. D) $ 40. Show Answer Correct Answer: C) $ 60. 19. What will impact the gross profit margin? A) Cost of sales increase. B) Decrease in operating (other) expenses. C) Sales price charged remaining the same. D) Increase in operating (other) expenses. Show Answer Correct Answer: A) Cost of sales increase. 20. A firm aiming to maximise sales will produce at an output level where A) FC = 0. B) VC < 0. C) AR = AC. D) MC = MR = TC. Show Answer Correct Answer: C) AR = AC. ← PreviousNext →Related QuizzesFinance QuizzesProfit Quiz 1Profit Quiz 3Profit Quiz 4Profit Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books