Short-run and Long-run: Theory of Production I

The conversion of factors of production into goods and services

• Productivity

• Outputting

• Specialization

• Production

What does the following formula show?   $\frac{Output}{Input}$  

• Productivity

• Total Output

• Specialization

• Production

Period of time when it is not possible to vary the quantities of all the factors of production used in the production process

• Long-run 

• Short-run 

• Average-run

•  Past-continuous

Period of time when it is possible to vary the quantities of all the factors of production used in the production process

• Long-run 

• Short-run 

• Average-run

•  Past-continuous

Which do you think is easiest to vary in the short run?

• Land

• Labour

• Capital

• Entrepreneurship

Factors that can be altered or changed in the short run or relatively short space of time

• Productive capacity 

• Variable factors 

• Fixed factors 

• Immobile factors

Select all of the following which represent variable factors of production

• Capital equipment 

• Cost of Raw material 

• Labour

•  Fuel and Power

•  Land

Which of the following represent fixed factors of production

• Capital equipment 

• Cost of Raw material 

• Labour

•  Fuel and Power

•  Land

Costs related to decisions made than cannot be changed or has no effect by future decision

• Fixed Costs

• Changing costs

• Sunked costs

• Immobile costs

The timeframe when some resources are fixed

• Short-term 

• Short-run 

• Long-term

•  Long-run