OPPORTUNITY COSTS

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OPPORTUNITY COSTS

OPPORTUNITY COSTS MCQS

  1. Oppoiunity Cost refers to ………………… in accepting an alternative couse of action.
  2. (a) value of sacrifice wade
    (b) Benefit of opportunity foregone
    (c) Both (a) and (b)
    (d) Neither (a) nor (b)

    (c) Both (a) and (b)

  3. Opportunity Cost refers to
  4. (a) Cost of opportunity foregone
    (b) Comparison between the policy that was chosen and the policy that was rejected
    (c) Costs relating to sacrificed alternatives
    (d) All of the above

    (d) All of the above

  5. The Cost of one thing in terms of the alternative given up is known as —
  6. (a) Production Cost
    (b) Physical Cost
    (c) Real Cost
    (d) Opportunity Cost

    (d) Opportunity Cost

  7. Opportunity Costs are a result of —
  8. (a) Technology obsolescence
    (b) Over production
    (c) Scarcity
    (d) Abundance of resources

    (c) Scarcity

  9. Opportunity Costs arise only when resources are —
  10. (a) Scarce
    (b) Restricted in availability
    (c) Available only to a limited extent
    (d) All of the above

    (d) All of the above

  11. Opportunity Cost arises only when alternatives are available. This statement is —
  12. (a) TRUE
    (b) FALSE
    (c) Partially True
    (d) None of the above

    (a) True

  13. If a resource can be put only to a particular use, then, Opportunity Costs —
  14. (a) Are applicable and quantifiable
    (b) Are applicable but not quantifiable
    (c) Are not applicable at all
    (d) None of the above

    (c) Are not applicable at all

  15. Opportunity Costs
  16. (a) Involve cash payment
    (b) Do not involve any cash payment
    (c) Both (a) and (b)
    (d) Neither (a) noi (b)

    (b) Do not involve any cash payment

  17. Outlay Costs —
  18. (a) Involve cash payment
    (b) Do not involve any cash payment
    (c) Both (a) and (h)
    (d) Neither (a) noi (h)

    (a) Involve cash payment

  19. Oppoitunity Cost is —
  20. (a) Recoided in books Of accounts
    (b) Not recoided in books of accounts
    (c) Sometimes (a) sometimes (b)
    (d) Neither (a) nor (b)

    (b) Not recoided in books of accounts

  21. Opportunity Costs are used for …….:. purposes
  22. (a) Accounting and Reporting
    (b) Cost Control
    (c) Decision taking
    (d) All of the above

    (c) Decision taking

  23. Which of the following is not true with reference to Opportunity Cost?
  24. (a) It is the value of the next best use for an economic good
    (b) It is the value of a sacrificed alternative
    (c) It is useful in decision—making
    (d) It does not take into consideration, the cost of time

    (d) It does not take into consideration, the cost of time

  25. Which of the following is/are true?
  26. (a) Total Cost includes only Variable Costs
    (b) Opportunity Cost is the value of the good of service forgone
    (c) Economic Costs include only Out—of—Pocket Costs
    (d) Both (a) and (c) above

    (b) Opportunity Cost is the value of the good of service forgone

  27. A Manager needs a Stenographer and a Clerk for the Accounts Department. But, due to financial constraints, he can able to recruit only one i.e. either Stenographer or Clerk. Finally he decides to recruit the Stenographer and had to give up the idea of having an Additional Clerk in the Accounts Department. Here, the Cost of not hiring an accounts clerk is known as —
  28. (a) Accounting Cost
    (b) Cost Possibility Curve
    (c) Opportunity Cost
    (d) Substitution Effect

    (c) Opportunity Cost

  29. ……………Cost is the Total Additional Cost that a Firm has to incur, as a result of implementing a major managerial decision.
  30. (a) Sunk
    (b) Incremental
    (c) Opportunity
    (d) Marginal

    (b) Incremental

  31. Incremental Cost equals
  32. (a) Additional Variable Cost only
    (b) Additional Fixed Costs only
    (c) Both (a) and (b)
    (d) Neither (a) nor (b)

    (c) Both (a) and (b)

  33. Which of the following statements true?
  34. (a) Marginal Cost is a sub-set of Incremental Cost
    (b) Incremental CoSt is sub—set of Marginal Cost
    (c) Marginal Cost is a sub—set of Sunk Cost
    (d) Sunk Cost is a sub—set of Incremental Cost

    (a) Marginal Cost is a sub-set of Incremental Cost

  35. Cost is not reIevant for Decision—Making
  36. (a) Economic
    (b) Opportunity
    (c) Sunk
    (d) Incremental cost

    (c) Sunk

  37. Which of the following statement best describes Dunk Costs?
  38. (a) Costs which are incurred in the past
    (b) Cost incurred by the Firm as bankruptcy of one of its Creditors result of
    (c) Cost incurred by the Firm as a result Of the fire that broke into one of the Firm’s Godown.
    (d) Setting off the losses that the Firm incurred in the previous years

    (a) Costs which are incurred in the past

  39. Which of the following is correct?
  40. (a) Firms that earn Accounting Profits are economically profitable.
    (b) Opportunity Cost plus Accounting Cost equals Economic Cost.
    (c) When a Firm’s Demand Curve slopes down, Marginal Revenue will rise as output rises.
    (d) Firms increase profits by selling more output than their rivals.

    (b) Opportunity Cost plus Accounting Cost equals Economic Cost.

  41. Suppose you find 1100. If you choose to use 100 to go to a football match, your opportunity cost of going to the game is
  42. (a) nothing, because you found the money.
    (b) Only The value of your time spent at the game + The Expected Normal Interest / Return on 1 100.
    (c) 1100 (because you could have used the 1 100 to buy other things) plus the value of your time spent at the game, plus the cost of the dinner you purchased at the game.
    (d) 1100 (because you could have used the 1 100 to buy other things).

    (b) Only The value of your time spent at the game + The Expected Normal Interest / Return on 1100.

  43. ……………… are readily identified and are traceable to a particular product, service, operation or plant.
  44. (a) Direct Costs
    (b) Indirect Costs
    (c) Both (a) and (b)
    (d) Neither (a) nor (b)

    (a) Direct Costs

  45. …………..are not readily identified nor visibly traceable to specific goods, services, operations, etc.
  46. (a) Direct Costs
    (b) Indirect Costs
    (c) Both (a) and (b)
    (d) Neither (a) nor (b)

    (b) Indirect Costs

  47. Accounting Process recognizes —
  48. (a) Direct Costs
    (b) Indirect Costs
    (c) Both (a) and (b)
    (d) Neither (a) nor (b)

    (c) Both (a) and (b)

  49. Read the following paragraph following four questions. Nicole owns a small pottery factory. the can make 1,000 pieces of pottery per year and sell them for rs 100 each. It costs Nicole rs 20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested rs 100,000 in her factory and equipment: rs 50,000 from her savings and rs 50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 per cent, too.)Nicole can work at a competing pottery factory for rs 40,000 per year. The accounting cost at Nicole’s pottery factory is:
  50. (a) rs 25000
    (b) rs 50000
    (c) rs 80000
    (d) rs 75000

    (a) rs 25000

  51. The economic cost at Nicole’s factory is:
  52. (a) rs 75000
    (b) rs 70000
    (c) rs 80000
    (d) rs 30000

    (b) rs 70000

  53. The accounting profit at Nicole’s pottery factory is:
  54. (a) rs 30000
    (b) rs 50000
    (c) rs 80000
    (d) rs 75000

    (d) rs 75000

  55. The economic profit at Nicole’s factory is:
  56. (a) rs 75000
    (b) rs 35000
    (c) rs 80000
    (d) rs 30000

    (d) rs 30000

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Cover Topic

“opportunity cost in a sentence”,”5 example of opportunity cost”

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