Dynamics of Markets: Costs & Revenue is one of 10 topics in the Grade 11 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. Which of the following is a cost that does not change with the level of output, such as rent on a factory?
Total fixed cost
Total variable cost
Marginal cost
Average variable cost
Answer: Total fixed cost — Total fixed cost (TFC) is cost that must be paid regardless of the level of output, such as rent or insurance, and does not change as production rises or falls.
Easy
2. Total cost (TC) is calculated as:
Total fixed cost plus total variable cost
Total fixed cost minus total variable cost
Total revenue minus total fixed cost
Average cost multiplied by fixed cost
Answer: Total fixed cost plus total variable cost — Total cost (TC) at any level of output equals total fixed cost (TFC) plus total variable cost (TVC): TC = TFC + TVC.
Medium
3. A firm has total fixed costs of R5 000 and total variable costs of R12 000 at an output of 100 units. Calculate the firm's total cost in rand.
