Question

Write F if it is false, V if it is true, depending on the case and explain why

1. Social costs is the benefit that society receives to maintain the operation of companies ()
2. As expenses are incorporated into the production process, they become costs. ()
3. The social costs are those that society must pay to maintain the operation of the company ()
4. The marginal cost is equal to the total cost divided by the number of units produced in the production process ()
5. At an equilibrium point of production, the entrepreneur relates the prices, costs, and quantities that he must sell, to know that he neither loses nor wins. ()
6 Advertising, participation in fairs and exhibitions are known as financial expenses ()
7. When the consumer is indifferent to exchanging a certain quantity of a good for another good, since he gets the same satisfaction at any point on the curve, it is called the marginal rate of substitution. ()
8. Standard costs is a predetermined cost that serves as a means of controlling the production process and the costs incurred. ()
9. The total costs of production constitutes the sum of payments or remunerations, both of the fixed and variable factors. ()
10. The indifference curves are represented as the optimal scale of the plant that the entrepreneur has to look for ()

Answer 1

1)-False,as a social cost is not a benefit that the society receives rather it's the cost that is related to the working of a firm.

It is a cost to society.

2) false, as an expense is recurring in nature or it means it has to be paid again after a certain period of time while cost is not recurring In nature.

3) true,a social cost is borne by the society due to the actions of firms.

4) False, as marginal cost is the change in total cost that usually arises from producing one 1 extra unit of a product,it's the cost of producing one extra unit of a product.

If total cost is divided by number of units produced it will be equal to cost/unit or average cost.

5) True,as at equilibrium a producer is at no loss no gain.

6) False,all these expenses are called operating expenses(selling expenses) as these all are done to increase the sales of the firm.

7)True, when a consumer sacrifices some amount of a good In exchange with other commodity while he/she maintains same level of satisfaction it is regarded as marginal rate of substitution.

8) True, as a standard cost servers as a means to identify the difference between expected cost and actual cost of production.

9) True, as total cost is the overall cost that was incurred in production of a product.

Total cost=Fixed cost+ variable cost.

10) False, as indifference curve represents a combination of products which gives same level of satisfaction.