O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2012 · Q181 Mark

The financial director of a company adds up the cost for the firm of rent, insurance, new machinery and the chief executive’s basic salary. The director then divides that total by the firm’s output. What has the director calculated?

Aaverage fixed cost

Baverage revenue

Caverage total cost

Daverage variable cost

✓ Correct answer

A: average fixed cost

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2012 Paper 1 Variant 1, question 18.

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