Entrepreneurship 4.05 Concept of Production

What is production?

• The creation of goods and services from economic resources

• The selection of inputs for making outputs

• The conversion process that results in time utility

• The process of assembling the factors of production

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.

• outputs.

• consumer goods.

• conversion process.

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• turn outdated products into new ones.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?

• Capital-intensive

• Labor-intensive

• Unit

• Batch

Which of the following outputs is considered an industrial good:

• A gallon of milk purchased by a family

• A textbook purchased by a college student

• A sewing machine purchased for home use

• A freezer purchased by a restaurant owner

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.