Short-Run Production Function Quiz

What is the short-run production function?

• The relationship between variable inputs and fixed inputs

• The relationship between input usage and output when at least one factor is fixed

• The relationship between labor and wages in a firm

• A function that measures only fixed costs in production

In the short run, which factor of production is usually fixed?

• Raw materials

• Machinery and factory buildings

• Number of workers

• Advertising expenses

What happens to output when additional units of a variable input are added in the short run?

• It always increases at a constant rate

• It increases, then eventually decreases due to diminishing returns

• It remains unchanged

• It decreases immediately

What does the Law of Diminishing Returns state?

• Adding more inputs always increases output indefinitely

• As more units of a variable input are added to a fixed input, output increases at a decreasing rate

• Total cost will always remain the same in the short run

• Only labor affects diminishing returns

If a company hires too many workers in a factory with limited space, what will likely happen?

• Output will increase indefinitely

• Productivity per worker will decrease due to overcrowding

• The fixed factors will also increase

• The law of diminishing returns will not apply

What is marginal product (MP)?

• The additional output gained from adding one more unit of input

• The total output divided by the number of workers

• The total cost of production

• The difference between fixed and variable costs

If a factory produces 100 units with 5 workers and 120 units with 6 workers, what is the marginal product of the 6th worker?

• 10 units

• 20 units

• 25 units

• 30 units

What happens to marginal product when the law of diminishing returns sets in?

• It continues to increase

• It remains constant

• It starts to decrease

• It becomes zero immediately

What is the short-run cost function?

• A relationship between a firm's costs and its level of output in the short run

• A way to measure profits only

• The cost of production when all inputs are variable

• A function that calculates only labor costs

Which of the following is an example of a fixed cost in the short run?

• Wages paid to temporary workers

• Rent for factory buildings

• Electricity bills

• Cost of raw materials