Production Function Quiz

The term Production Function refers to the

• use of machinery and equipment in production.

• relationship between costs and output.

• relationship between inputs and output.

• role of labor unions.

The production period in which at least one input is fixed in quantity is the

• production run.

• long run.

• short run.

• planning horizon.

The difference between the short-run and the long-run is

• three months, or one business quarter.

• the time it takes for firms to change all inputs in the production process.

• the time it takes for firms to change only their variable inputs.

• More information is required to answer this question.

In a call center, which of the following situations can be considered as a variable input in the short run?

• the level of computer software being utilized

• the number of call center representatives on duty at the center

• the number of call center managers or supervisors

• the size (e.g., square footage) of the call center

Which of the following holds true?

• When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling.

• When MP is rising, MC is falling, and when MP is falling, MC is rising.

• When MP is rising, MC is constant, and when MP is falling, MC is negative.

• There is no relationship between MP and MC.

The marginal product of the variable input

• is always positive.

• typically falls then rises.

• is equal to the total product divided by the total amount of the variable input employed.

• None of the above

Which of the following statements about the short-run production function is true?

• MP always equals AP at the maximum point of MP.

• MP always equals zero when TP is at its maximum point.

• TP starts to decline at the point of diminishing returns.

• When MP diminishes, AP is at its minimum point.

• None of the above is true.

The marginal product of the fourth worker is

• 150 units of output.

• 24 units of output.

• negative.

• 36 units of output.

Average product is at a maximum when the number of workers that are hired is

• 1.

• 2.

• 3.

• 4.

Output (Total Product) is maximized when

• average productivity is at its maximum.

• the 'law of diminishing returns' sets in.

• marginal productivity is zero.

• marginal productivity is at its maximum.