中文（繁體）
中文（简体）
English
S4 Economics: Costs of Production – Intermediate Practice (10 Questions)
S4 Economics: Costs of Production – Intermediate Practice (10 Questions)
Ten items focus on the shape of cost curves: diminishing returns, rising marginal cost, the U-shaped average, the marginal-average crossing, and scale economies.
Quick answer 1. extra output eventually falls with other factors fixed; 2. marginal product falls; 3. it is pulled down; 4. spreading first, diminishing returns later; 5. 280, about 93.33 and 70; 6. from 10 to 8; 7. it passes through the minimum; 8. long-run cost falling versus rising; 9. 39; 10. relative size is what counts.
01 Paper details (check answers afterwards)
| Item | Detail |
|---|---|
| Questions | 10 questions |
| Suggested time | about 25 minutes |
| Difficulty mix | Foundation 4 · Intermediate 3 · Challenge 2 · Error redo 1 |
| Chapter | Chapter: S4 Economics | Costs of Production: fixed cost, marginal cost and scale |
| Level | S4 |
02 Questions (10 items)
- FoundationWhat does the law of diminishing marginal returns state?
- FoundationWhy does marginal cost eventually rise?
- FoundationWhen marginal cost is below average cost, what happens to average cost?
- FoundationWhy is the average cost curve U-shaped?
- IntermediateFixed cost is 100; total variable cost for 1 to 4 units is 60, 110, 180 and 280. Find total, average and marginal cost at 3 units.
- IntermediateOne extra hour of labour lifts marginal product from 20 to 25 units, with a wage of 200 per hour. How does marginal cost change?
- IntermediateHow does the minimum of average variable cost relate to marginal cost?
- ChallengeWhat do economies and diseconomies of scale mean?
- ChallengeAverage cost is 50 at 10 units and 49 at 11 units. What is the marginal cost of the eleventh unit?
- Error redoA student says average cost must rise whenever marginal cost rises. What is wrong?
03 Answers and one-line notes
| # | Answer | One-line note |
|---|---|---|
| 1 | Holding other factors constant, adding more of one factor eventually yields smaller increases in output. | The phrase holding other factors constant is essential; it does not apply when all factors rise together. |
| 2 | Because marginal product falls, so each extra unit needs more input. | Marginal cost and marginal product move in opposite directions. |
| 3 | It is pulled down. | Think of exam averages: a new score below the average pulls the average down. |
| 4 | At first falling average fixed cost pulls it down, then diminishing returns push it up. | Two forces dominate in turn, so it falls and then rises. |
| 5 | Total cost 280, average cost about 93.33 and marginal cost 70. | Marginal cost is the jump in total cost from the second to the third unit, 280 minus 210. |
| 6 | It falls from 10 to 8, since 200 divided by 20 is 10 and by 25 is 8. | Wage divided by marginal product gives marginal cost, so higher output per hour means lower cost. |
| 7 | The marginal cost curve passes through the minimum of average variable cost. | The logic matches average cost: marginal cost rising through the average marks the turning point. |
| 8 | Economies of scale mean long-run average cost falls as output grows; diseconomies mean it rises. | These are long-run ideas where all factors can change, unlike short-run diminishing returns. |
| 9 | 39, because total cost rises from 500 to 539. | Marginal cost below average cost explains why the average fell, which checks the answer. |
| 10 | As long as marginal cost stays below average cost, the average keeps falling. | What matters is the marginal value relative to the average, not the direction of marginal cost alone. |
04 What to do after marking
- After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
- Repeat the same item two days later; move to the next paper only when both attempts are correct.
- Parents only need the answer and note columns; there is no need to explain every item.
Find a tutor freeTutor Registration →
Questions and answers are written originally by the TutorZone team and are not taken from any school, publisher or examination authority paper. Every value is checked by computer.