- A
A billing unit roughly equal to one character in the input or output text
Why wrong: Tokens are approximately 4 characters or ¾ of a word — not one character. Pricing depends on total tokens, not characters.
- B
A billing unit roughly equal to ¾ of an English word, counting both input and output
Tokens ≈ ¾ word — both prompt tokens (input) and completion tokens (output) are counted and priced for Azure OpenAI usage.
- C
A subscription-based pricing model where a fixed number of API calls are included monthly
Why wrong: Subscription pricing is an alternative billing model — Azure OpenAI primarily uses pay-per-token pricing.
- D
Authentication tokens required to secure API calls to Azure OpenAI
Why wrong: Auth tokens are security credentials — pricing tokens are the unit of text measurement for API billing.
Quick Answer
The correct answer is that token pricing in Azure OpenAI is a billing unit roughly equal to ¾ of an English word, counting both input and output. This is because Azure OpenAI measures API usage by breaking text into tokens—small chunks of characters or subwords—where a token averages about 0.75 words, and the total cost is calculated by summing all tokens in both your prompt and the model’s completion. On the Microsoft Azure AI Fundamentals AI-900 exam, this concept tests your understanding of how Azure OpenAI meters consumption, often appearing in scenario-based questions where you must identify what drives cost. A common trap is assuming only the output is billed, but remember that every token you send in and receive back counts. To recall this easily, think of the “three-quarter rule”: for every four English words, you’re billed for roughly three tokens, and both sides of the conversation add up.
AI-900 Practice Question: Describe features of generative AI workloads on Azure
This AI-900 practice question tests your understanding of describe features of generative ai workloads on azure. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
What is 'token pricing' in Azure OpenAI and what counts as a token?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
A billing unit roughly equal to ¾ of an English word, counting both input and output
Option B is correct because Azure OpenAI uses token-based pricing, where a token is a billing unit that represents roughly 0.75 of an English word. Both input (prompt) and output (completion) text are counted toward the total token usage, and the cost is calculated based on the total number of tokens consumed per API call.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
A billing unit roughly equal to one character in the input or output text
Why it's wrong here
Tokens are approximately 4 characters or ¾ of a word — not one character. Pricing depends on total tokens, not characters.
- ✓
A billing unit roughly equal to ¾ of an English word, counting both input and output
Why this is correct
Tokens ≈ ¾ word — both prompt tokens (input) and completion tokens (output) are counted and priced for Azure OpenAI usage.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A subscription-based pricing model where a fixed number of API calls are included monthly
Why it's wrong here
Subscription pricing is an alternative billing model — Azure OpenAI primarily uses pay-per-token pricing.
- ✗
Authentication tokens required to secure API calls to Azure OpenAI
Why it's wrong here
Auth tokens are security credentials — pricing tokens are the unit of text measurement for API billing.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse the concept of a 'token' in billing with 'authentication tokens' or assume a simple character-based count, leading them to pick Option A or D instead of understanding the subword-based tokenization used by Azure OpenAI.
Detailed technical explanation
How to think about this question
Under the hood, Azure OpenAI uses a subword tokenization algorithm (e.g., Byte-Pair Encoding or similar) to split text into tokens, which can be as short as one character or as long as one word, depending on frequency. A real-world scenario: a prompt like 'Hello, world!' might be tokenized as ['Hello', ',', ' world', '!'] — 4 tokens — and both the prompt and the generated response are summed for billing, so a long conversation can quickly accumulate thousands of tokens.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this AI-900 question test?
Describe features of generative AI workloads on Azure — This question tests Describe features of generative AI workloads on Azure — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: A billing unit roughly equal to ¾ of an English word, counting both input and output — Option B is correct because Azure OpenAI uses token-based pricing, where a token is a billing unit that represents roughly 0.75 of an English word. Both input (prompt) and output (completion) text are counted toward the total token usage, and the cost is calculated based on the total number of tokens consumed per API call.
What should I do if I get this AI-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
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Last reviewed: Jun 11, 2026
This AI-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AI-900 exam.
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