FORMATIVE ASSESSMENT 3

NAME OF STUDENT: ___________________ CLASS: _____

TOTAL MARKS: 15 MARKS DATE: 28.04.2022
SUBJECT: ECONOMICS TIME: 30MINS

Questions 1-3 will be based on the information given in the tabular form (10marks)

1. Complete the following table (completing each column will get you 1 mark each)

Pizzas sold Sales Total Fixed Total Total costs Profit/loss

per week revenue ($) costs ($) Variable ($) ($)
costs ($)
0 0 -4000
400 4000 8000
800 4000
1200 18000

2. For each quantities sold, calculate the profit/loss per unit (4)

Pizzas sold/week Profit/loss per unit

0
400
800
1200

3. What is the price of each pizza sold per week? (1) _____________

4. Differentiate between variable cost and average cost (2)

 5. A firm intends to expand its scale of production by investing in additional factory space and
machinery. What immediate impact will this decision have on its costs? (1)

a) Total variable costs will rise

b) Total fixed costs will rise
c) Total costs will be unchanged
d) Average costs will rise

6. Which of the following is a fixed cost to a manufacturing firm? (1)

a) Insurance on buildings
b) Overtime payments to workers
c) The cost of energy
d) The cost of raw materials

7. A firm produces 50 units of output. The total variable cost of this output is $200 and the
total fixed cost is $300. What is the average cost of production? (1)

1. $2
2. $4
3. $6
4. $10

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