Costs

Question 1

Fixed Costs

Answer 1

Business expenses that do not change depending on whether the quantity of goods or services produced changes
e.g. Rent, Salaries
Also known as indirect costs or overheads

Question 2

Variable Costs

Answer 2

Business expenses that change depending on whether the quantity of goods and services produced changes
e.g.
Also known as Direct Costs

Question 3

Total Costs

Answer 3

Total fixed costs + Total Variable costs

Question 4

Fixed Costs Diagram (unfinished)

Answer 4

-

Question 5

Variable Costs Diagram (unfinished)

Answer 5

-

Question 6

Total costs diagram (unfinished)

Answer 6

-

Question 7

Average Fixed Costs Diagram (unfinished)

Answer 7

-

Question 8

Average Variable Costs Diagram (unfinished)

Answer 8

-

Question 9

Average Total Costs Diagram (unfinished)

Answer 9

-

Question 10

Marginal Cost

2

Answer 10

The cost of producing one additional unit of output

Change in Total Cost / Change in Output

Question 11

Marginal Cost Diagram (unfinished)

Answer 11

• (nike tick)

Question 12

Marginal Cost & Average Cost

Answer 12

Lines should intersect at lowest point of Average Cost