Page 4 - HA-COST
P. 4

(c) TVC

                       (d) AVC
                          Ans-(b)
                  4.  If the TC and AFC is 78 and 60 respectively, for 1 unit of output. What

                      will be the AVC for 1 unit of output?
                       (a) 18
                       (b) 60

                       (c) 20
                       (d) None of the above
                          Ans-(a)
                  5.  The minimum point of ______curve reaches before the _____ curve in the

                      short period.
                       (a) AFC,AVC

                       (b) AC,AVC
                       (c) AVC,AC
                       (d) AFC,AV
                          Ans-(c)


               ASSIGNMENT
                       (1 MARK QUESTIONS)

                   1.  Why is AC greater than AVC?
                   2.  What is relationship between AVC and AC,if TFC is zero?
                   3.  Why AC falls upto a greater output level as compared to AVC?

                   4.  Can AC and AVC carve is equal at any level of output? Why or why not?
                   5.  What happens to AC if AFC and AVC both fall with an increase in
                       output?
                       (3/ 4 MARKS QUESTON)

                   1.  Define AFC.Discuss the shape of AFC curve with the help of a schedule
                       and diagram.
                   2.  What is AVC? Why is AVC curve U shaped?

                   3.  Why does the vertical distance between AC and AVC curve gradually
                       decline?
                   4.  Find out TFC, AFC, AVC and AC.

                       Output      TC          TVC         TFC         AFC          AVC         AC
                       0           12          0
                       1           18          6
                       2           22          10
                       3           27          15
                       4           36          24
                   5.  State whether the following statements are true or false. Give reasons.

                       (a) When AVC is minimum AC is constant.
                       (b) AVC can fall even when MC is rising
   1   2   3   4   5