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Home Questions G3P7VS6BDG
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Production and Costs

Question:

Match List-I with List-II

List-I

List-II

(A) Total Cost

(I) Change in total cost when an additional unit of output is produced.

(B) Marginal Cost

(II) Vertical summation of Average Fixed Cost (AFC) and Average Variable Cost (AVC) curves.

(C) Fixed Cost

(III) Explicit Costs + Implicit Costs.

(D) Short period Average Cost (AC) Curve

(IV) Does not change with increase or decrease in output.

Choose the correct answer from the options given below:

Options:

(A)-(III), (B)-(II), (C)-(I), (D)-(IV)

(A)-(III), (B)-(I), (C)-(II), (D)-(IV)

(A)-(III), (B)-(I), (C)-(IV), (D)-(II)

(A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Correct Answer:

(A)-(III), (B)-(I), (C)-(IV), (D)-(II)

Explanation:

The correct answer is Option (3) → (A)-(III), (B)-(I), (C)-(IV), (D)-(II)

(A) Total Cost → (III) Explicit Costs + Implicit Costs. → Total Cost includes both explicit (actual expenditure) and implicit (opportunity) costs.

(B) Marginal Cost → (I) Change in total cost when an additional unit of output is produced. → Marginal Cost is the additional cost of producing one more unit.

(C) Fixed Cost → (IV) Does not change with increase or decrease in output. → Fixed Costs remain unchanged regardless of output level.

(D) Short period Average Cost (AC) Curve → (II) Vertical summation of Average Fixed Cost (AFC) and Average Variable Cost (AVC) curves. → In the short run, AC = AFC + AVC.

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