AP Microeconomics Practice Quiz: Short-Run Production Costs
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 12 questions to check your progress.
Question 1 of 12
All Questions (12)
A) $0
B) $500
C) Less than $500 but more than $0
D) It cannot be determined from the information given.
Correct Answer: B
According to the provided content, total fixed cost remains constant at all output levels, including zero output. Since variable costs are zero when output is zero, the total cost will be equal to the total fixed cost.
A) Specialization and the division of labor
B) Diminishing marginal returns
C) An increase in fixed costs
D) A decrease in input costs
Correct Answer: B
The content explicitly states that production functions with diminishing marginal returns yield an upward-sloping marginal cost curve. As more variable inputs are added to fixed inputs, their marginal product eventually falls, causing the cost of producing each additional unit to rise.
A) Diminishing marginal returns
B) The presence of high fixed costs
C) Specialization and the division of labor
D) An increase in the price of a variable input
Correct Answer: C
The provided content states that specialization and the division of labor reduce marginal costs for firms. As a firm initially increases output, workers can specialize in tasks they are good at, leading to greater efficiency and a lower cost for producing additional units.
A) The total fixed cost curve will shift up.
B) The marginal cost and average total cost curves will shift up.
C) Only the average fixed cost curve will shift up.
D) The marginal cost curve will shift down.
Correct Answer: B
An increase in the wage rate is an increase in a variable input cost. This will raise the cost of producing each additional unit (marginal cost) and the average variable cost. Because average total cost is the sum of average variable and average fixed costs, it will also shift up. Fixed costs are unaffected.
A) $5
B) $15
C) $20
D) $25
Correct Answer: B
Total Cost (TC) is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC). Here, $200 (TC) = $50 (TFC) + TVC, so TVC = $150. Average Variable Cost (AVC) is TVC divided by quantity. So, AVC = $150 / 10 = $15.
A) Average variable cost must be decreasing.
B) Average total cost must be at its minimum.
C) Average variable cost must be increasing.
D) Total fixed cost must be increasing.
Correct Answer: C
The marginal cost curve intersects the average variable cost curve at its minimum point. If the marginal cost (the cost of the next unit) is above the current average, it will pull the average up. Therefore, if MC > AVC, the AVC curve must be upward-sloping (increasing).
A) The total fixed cost and marginal cost curves will shift up.
B) The average fixed cost curve will shift down, but the marginal cost curve will be unaffected.
C) The marginal cost and average variable cost curves will shift down.
D) All cost curves will shift up.
Correct Answer: C
Increased productivity means more output can be produced with the same amount of input, which lowers the cost per unit. This directly reduces the cost of producing each additional unit (marginal cost) and the average variable cost. This is a shift in cost curves in response to a change in productivity.
A) total fixed cost resulting from producing one more unit of output.
B) average total cost resulting from producing one more unit of output.
C) total cost resulting from producing one more unit of output.
D) total revenue resulting from selling one more unit of output.
Correct Answer: C
The content states that marginal cost changes as total output changes. Its definition is the additional cost incurred from producing one more unit, which is calculated as the change in total cost divided by the change in output.
A) Average fixed cost is constant, while average variable cost first falls and then rises.
B) Average fixed cost continuously falls, while average variable cost first falls and then rises due to diminishing returns.
C) Both average fixed cost and average variable cost continuously fall as output increases.
D) Specialization causes both average fixed and average variable costs to rise initially.
Correct Answer: B
The ATC curve is the sum of the AFC and AVC curves. The AFC curve always falls as output increases because a constant total fixed cost is spread over more units. The AVC curve is U-shaped due to initial specialization (causing it to fall) and eventual diminishing marginal returns (causing it to rise). The sum of these two shapes results in the U-shape of the ATC curve.
A) Total cost
B) Marginal cost
C) Average variable cost
D) Average fixed cost
Correct Answer: D
Average Fixed Cost (AFC) is calculated as Total Fixed Cost (TFC) divided by quantity (Q). Since TFC remains constant at all output levels, as Q increases, the value of TFC/Q must continuously decrease. This is often referred to as 'spreading the overhead'.
A) $10
B) $15
C) $20
D) $45
Correct Answer: A
Marginal cost is the change in total cost from producing one additional unit. The total cost of producing 1 unit is $35, and the total cost of producing 2 units is $45. The change in total cost is $45 - $35 = $10.
A) marginal cost only.
B) average variable cost and marginal cost.
C) average fixed cost and average total cost.
D) marginal cost and average fixed cost.
Correct Answer: C
Rent is a fixed cost because it does not change with the level of output. An increase in rent raises Total Fixed Cost (TFC). This will cause the Average Fixed Cost (AFC = TFC/Q) and Average Total Cost (ATC = AFC + AVC) curves to shift up. It will not affect marginal cost or average variable cost, as these are determined by variable input costs.