THEORY PRODUCTION

    The relationship between input and output is                      .

 

• A.         cost function

• B.          supply function

• C.         demand function

• D.         production function

 

1.      Stage 2 shows the Law of                    return.

 

• A.         positive

• B.          negative

• C.         increasing

• D.         decreasing

      In the short run, stage III of production begins from the point where                      .

• A.         marginal product equal zero

• B.          total product at minimum point

• C.         total product started to increase

• D.         average product at maximum point

     When average product reach maximum point,                      .

• A.         marginal product equal average product

• B.          marginal product more than total product

• C.         marginal product less than average product

• D.         marginal product more than average product

Which of the following factor is likely to be variable in the short run?

 

 

• A.         The size of the firm’s plant.

• B.          The location of the firm.

• C.         The number of workers.

• D.         The amount of machinery used.

Diminishing returns refers to the decrease in            .

• A.         average product that results from increases in the variable input

• B.          total product that results from increases in the variable input

• C.         marginal product that results from increases in the variable input

• D.         total revenue that results from increases in the variable input

    Production refers to all activities involved in the production of goods and sevicec

• TRUE

• FALSE

The marginal product of the variable input is at a maximum at the level of output that corresponds to the inflection point on the short-run production function.

• TRUE

• FALSE

  When an input's average product exceeds its marginal product, average product is increasing.

• TRUE

• FALSE

Stage I of production begins where the average product of the variable input is equal to the marginal product of the variable input.

• TRUE

• FALSE