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WorksheetsProduction
Total questions: 20
Worksheet time: 7mins
It is the process a firm uses to transform inputs (e.g. labor, capital, raw materials) into outputs, i.e. the goods or services the firm wishes to sell.
Production
Production Theory
Manufacturing
Merchandising
An effort to explain the principles by which a business firm decides how much of each commodity that it sells it will produce, and how much of each kind of labour, raw material, fixed capital good, etc., that it employs it will use.
Production
Production Theory
Manufacturing
Merchandising
The following are the factors of production except
Raw Materials
Resources
Fixed Inputs
Variable Input
A factor of production that changes as output increases.
Raw Materials
Resources
Fixed Inputs
Variable Input
A factor of production that do not change as output increases.
Raw Materials
Resources
Fixed Inputs
Variable Input
A factor of production that are transformed into goods and services that have considerable value (utility) to consumers.
Raw Materials
Resources
Fixed Inputs
Variable Input
It refers to the greatest output that can be created given an exact number of inputs.
Output
Input
Production Function
Product
A function of land resources, which also refer to raw materials; labor; a manpower resource; and a capital which include equipment, machinery, and other capital goods.
Input
Output
Product Function
Product
The simple production function is
expressed as:
Q = f (land, property, capital)
Q = f (land, property, equipment)
Q = f (land, labor, capital)
Q = f (resources, fixed input, variable input)
It states that as more inputs are added to production while holding other inputs fixed, the additional outputs start to diminish at a certain point.
Law of Supply and Demand
Price Theory
Production Theory
Law of Diminishing Marginal Returns
It refers to the change in output given additional variable inputs holding other inputs fixed.
Average Product
Marginal Product
Total Product
Labor
It is the total product per unit (Q) of added input (TP/L)
Average Product
Marginal Product
Total Product
Labor
What is the Average product if the Total Product (TP) is 30 and the Labor (L) is 6
4
5
6
7
The stage of production that is characterized by decreasing, but positive marginal returns. As more of the variable input is added to the fixed input, the marginal product of the variable input decreases.
Stage I
Stage II
Stage III
Stage IV
This stage results from increasing average product.
First Stage
Second Stage
Third Stage
Fourth Stage
This stage of production results due to negative marginal returns. In this stage of short-run production, the law of diminishing marginal returns causes marginal product to decrease so much that it becomes negative.
Stage I
Stage II
Stage III
Stage IV
What is the Average product if the Total Product (TP) is 25 and the Labor (L) is 3
8.1
7.3
8.3
7.1
The Phase of Production Function where Total Product (TP) increases, the Marginal Product (MP) diminishes and the Average Product (AP) decreases.
Phase I
Phase II
Phase III
None of the Above
The Second Stage sets it at the peak of average product, experiencing a wide range of decreasing marginal returns, and the law of diminishing marginal
returns
TRUE
FALSE
The third stage is then characterized by negative marginal returns.
FALSE
TRUE
