The Costs of Production Chapter 6

THE PRODUCTION FUNCTION 1. Which of the following are factors of production? A) Output in a production function. C) Land, labor, capital, and entrepreneurship. B) Productivity. D) All of the above. Answer: C Type: Definition Page: 125 2.A production function: A) Shows the cost of producing any level of output. B) Is a technological relationship between factors of production and output. C) Expresses the least-cost method of producing a given level of output. D) Expresses our ability to produce various combinations of goods, using all of our resources. Answer: B Type: Definition Page: 125 3.A production function matches a given combination of factor inputs with the: A) Lowest average cost of producing the output. B) Maximum-cost method for combining the inputs. C) Least cost of producing output. D) Maximum output that can be technologically produced from the inputs. Answer: D Type: Definition Page: 125 4.A production function shows the: A) Minimum amount of output that can be obtained from alternative combinations of inputs. B) Maximum quantities of inputs required to produce a given quantity of output. C) Maximum output we can produce with varying combinations of factor inputs. D) Output capacity of the entire economy. Answer: C Type: Definition Page: 125 5.Which of the following statements is true about the production function? A) It represents maximum technical efficiency. B) It represents the most output attainable from any combinations of factor inputs. C) It describes the output capacity of a single firm. D) All of the above. Answer: D Type: Basic Understanding Page: 125