Rent of a building is:
- Fixed cost
- Variable cost
- Marginal cost
- Total cost
Show answer and explanation
Answer: A. Fixed cost
Building rent must be paid regardless of the level of output/business activity, making it a fixed cost.
I.Com Economics: Cost and Revenue, questions with answers
Practise 18 real Federal Board questions on Cost and Revenue from 2023 to 2026. See the answer and explanation as soon as you answer.
18real questions
14multiple choice
5exam sessions
About Cost and Revenue in I.Com Economics
Cost and Revenue is one of the 8 main chapters in our Federal Board I.Com Economics question bank (11th and 12th class), and about 5% of its real questions come from it. Tayyari Karo has 18 real questions on this chapter from 2023 to 2026; 14 are multiple choice and marked instantly, and the rest are short and long questions with a model answer. By difficulty: 14 medium, 4 easy.
Work through the questions below, then open the explanation for each one. Redo the ones you missed a few days later.
Try 8 real questions
These are real past-paper questions. Think of your answer first, then open the explanation.
A firm reaches its shutdown point where:
- AC>AR
- AC=AR
- AC<AR
- AVC=AR
Show answer and explanation
Answer: D. AVC=AR
The shutdown point occurs where price (AR) equals average variable cost (AVC) — below this, the firm cannot even cover variable costs and should stop producing.
Total variable cost divided by the total output produced is calculated as:
- Marginal cost
- Average fixed cost
- Average variable cost
- Total cost
Show answer and explanation
Answer: C. Average variable cost
Average variable cost (AVC) = Total variable cost (TVC) / output (Q).
A firm attains equilibrium when:
- MC = MR
- AC = AR
- MC > MR
- MC < MR
Show answer and explanation
Answer: A. MC = MR
A firm maximizes profit (is in equilibrium) at the output where marginal cost equals marginal revenue.
Marginal revenue is equal to:
- Price × quantity
- Total revenue ÷ quantity
- Change in total revenue ÷ change in quantity
- Total revenue − average revenue
Show answer and explanation
Answer: C. Change in total revenue ÷ change in quantity
MR = ΔTR/ΔQ, the addition to total revenue from selling one more unit.
A firm gets normal profit when:
- Average revenue is equal to average cost
- Average revenue is greater than average cost
- Average revenue is less than average cost
- Marginal revenue is equal to zero
Show answer and explanation
Answer: A. Average revenue is equal to average cost
Normal profit occurs when AR = AC, i.e., total revenue just covers total cost (including opportunity cost of the entrepreneur).
Briefly explain the following: (a) Total Cost (b) Average Cost (c) Marginal Cost.
Show model answer
(a) Total Cost (TC): the sum of all costs (fixed + variable) a firm incurs to produce a given level of output.
(b) Average Cost (AC): cost per unit of output, AC = TC/Q.
(c) Marginal Cost (MC): the addition to total cost from producing one more unit of output, MC = ΔTC/ΔQ.
Differentiate between 'fixed cost' and 'variable cost'.
Show model answer
Fixed cost (FC): costs that do not change with the level of output in the short run and must be paid even if output is zero (e.g. rent, insurance).
Variable cost (VC): costs that change directly with the level of output — they rise as output rises and fall as output falls (e.g. raw materials, wages of casual labour).
Sessions with Cost and Revenue questions
| Session | Questions |
|---|---|
| 2026 Annual | 4 |
| 2025 1st Annual | 4 |
| 2025 2nd Annual | 4 |
| 2024 Annual | 4 |
| 2023 Annual | 2 |
Common questions
What does the Cost and Revenue chapter cover on this page?
18 real Federal Board (FBISE) Economics questions on Cost and Revenue from 2023 to 2026, for 11th and 12th class. Each one shows the session it came from.
Are the answers official?
No. We could not find an official FBISE marking scheme for these papers, so the answers and explanations are written by Tayyari Karo for practice. Check anything important with your teacher or textbook.
Is it free?
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