What is the definition of production in microeconomics?

• The process of converting inputs into final output

• The total output of goods and services

• The change in total product with additional input

• The efficiency of input transformation

Which of the following is considered an input in the production process?

• Goods and services

• Capital and labour

• Total product

• Marginal product

What does the term 'labour productivity' refer to?

• Output per unit of input

• Output per worker or per labour hour

• Total output of goods and services

• Change in total product with additional input

What is the formula for average product (AP)?

• AP = TP/L

• AP = L/TP

• AP = MP/L

• AP = TP/MP

What does the Law of Diminishing Marginal Returns state?

• Total output increases indefinitely with more input

• Additional output gained will eventually diminish

• Output per worker increases with more input

• Total product remains constant with more input

What are fixed costs?

• Costs that vary directly with output

• Costs that do not vary with output

• Costs that increase as output rises

• Costs that are zero when output is zero

What is the formula for total costs in the short run?

• TC = TFC + TVC

• TC = TFC - TVC

• TC = TFC * TVC

• TC = TFC / TVC

What does the Law of Diminishing Returns imply in the short run?

• Fixed costs decrease as output increases

• Marginal product increases indefinitely

• Marginal product falls as more variable factors are added

• Total costs remain constant

How is marginal cost (MC) calculated?

• Change in total costs/change in output

• Total costs/output

• Total fixed costs/output

• Total variable costs/output

What happens to average fixed costs (AFC) as output increases?

• AFC increases

• AFC decreases

• AFC remains constant

• AFC becomes zero