Waec Model Questions Vol1 2018 Economics Question 40

Practice objective / multiple choice question 40 from the 2018 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2018 Economics Objective / Multiple Choice Hard Difficulty
Question 40 WAEC_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

The following data show the total cost (TC) incurred by a firm at different output levels (Q).\n\nQ (units): 10, 20, 30, 40, 50\nTC (₦ thousand): 500, 900, 1300, 1800, 2500\n\n(a) Using the data, indicate the range of output where the firm experiences economies of scale, constant returns to scale, and diseconomies of scale.\n(b) Assuming average total cost varies linearly between the observed points, estimate the output level at which average total cost would be exactly ₦44 thousand per unit.

Answer Options

Correct Answer A. Economies of scale: up to 30 units; constant returns at about 30 units; diseconomies beyond 30 units. ATC = 44 thousand naira at approximately Q = 34 units.
B. Economies of scale: up to 40 units; constant returns at about 40 units; diseconomies beyond 40 units. ATC = 44 thousand naira at approximately Q = 38 units.
C. Economies of scale: up to 30 units; constant returns at about 30 units; diseconomies beyond 30 units. ATC = 44 thousand naira at approximately Q = 40 units.
D. Economies of scale: up to 20 units; constant returns at about 20 units; diseconomies beyond 20 units. ATC = 44 thousand naira at approximately Q = 28 units.
Correct Answer
A
Correct Option:
Economies of scale: up to 30 units; constant returns at about 30 units; diseconomies beyond 30 units. ATC = 44 thousand naira at approximately Q = 34 units.

About This Question

This is Waec Model Questions Vol1 2018 Economics Question 40. It is one of the objective questions from the 2018 Waec Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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