4.03 Role of Production

What is production?

• The selection of inputs for making outputs
• The process of assembling the factors of production
• The conversion process that results in time utility
• The creation of goods and services from economic resources

Which of the following is an example of production?

• Reading a new novel
• Purchasing food items
• Providing home security
• Answering your home telephone

The specific resources used in a company�s production are called

• Inputs
• Consumer goods
• Outputs
• Conversion processes

In production, the purpose of the conversion process is to\:

• Control the costs of production
• Find markets for the firm's products
• Turn inputs into products
• Turn outdated products into new ones

What kind of conversion process is being used in an automated assembly line that produces soft drinks?

• Batch
• Labor-intensive
• Unit
• Capital-intensive

Which of the following outputs is considered an industrial good\:

• A freezer purchased by a restaurant owner
• A gallon of milk purchased by a family
• A textbook purchased by a college student
• A sewing machine purchased for home use

One of the benefits of production to consumers is that production\:

• Makes use of automation
• Provides a way to earn profits
• Creates form utility
• Provides a way to be competitive

Why is production important to businesses?

• It enables businesses to charge high prices
• It eliminates competition
• It creates goods and services businesses can sell
• It informs businesses about consumers� needs and wants

Efficient production enables businesses to\:

• Charge higher prices than competitors
• Obtain advance orders for goods and services
• Make an accurate forecast of sales
• Turn out the most products at the least cost

Which of the following is a true statement about production activities\:

• They vary depending on the product being created
• Most are considered difficult tasks
• They are not necessary for the success of the business
• They rely solely on capital resources