Production And Factor Market

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| By Alston Christopher
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Alston Christopher
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Quizzes Created: 2 | Total Attempts: 201
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  • 1/15 Questions

    Period during which only some factors or variables can be changed because there is not enough time to change the others.

    • Short run
    • Long run
    • Time period
    • Duration
    • Business cycle
    • Base year
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About This Quiz

Explore key economic concepts through the 'PRODUCTION and FACTOR MARKET' quiz. Assess your understanding of market periods, capital types, production functions, and the role of substitutability in economics. Ideal for students and professionals looking to deepen their economic insight.

Production And Factor Market - Quiz

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  • 2. 
    Tools,  machinery, equipment, and buildings are examples of - ProProfs

    Tools,  machinery, equipment, and buildings are examples of

    • Physical capital

    • Financial capital

    • Entrepreneurial services

    • Non-physical assets

    • Asset management

    • Fund management

    Correct Answer
    A. Physical capital
    Explanation
    Physical capital refers to tangible assets that are used in the production process, such as tools, machinery, equipment, and buildings. These assets are essential for businesses to operate and generate income. They can be seen and touched, unlike financial capital, which includes money and other financial instruments. Entrepreneurial services refer to the skills and efforts of individuals in starting and managing businesses, while asset management and fund management are related to the management of financial assets. Therefore, the correct answer is physical capital as it best represents the examples given.

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  • 3. 
    It refers to the ability of goods or services to be replaced by another good or service in use or consumption - ProProfs

    It refers to the ability of goods or services to be replaced by another good or service in use or consumption

    • Substitutability

    • Complementarity

    • Specificity

    • Dependability

    • Reliability

    • Durability

    Correct Answer
    A. Substitutability
    Explanation
    Substitutability refers to the ability of goods or services to be replaced by another good or service in use or consumption. This means that if one product or service is not available or becomes too expensive, consumers have the option to switch to a similar alternative. Substitutability is important because it gives consumers more choices and helps to keep prices competitive in the market.

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  • 4. 
    The quality of being exact rather than general. Synonyms: specialness. - ProProfs

    The quality of being exact rather than general. Synonyms: specialness.

    • Specificity

    • Duplicity

    • Microeconomics

    • Macroeconomics

    • Aggregate

    • Usability

    Correct Answer
    A. Specificity
    Explanation
    The word "specificity" refers to the quality of being exact or precise rather than general. It is synonymous with "specialness." This word is unrelated to the other options provided, which include "duplicity" (deceitfulness), "microeconomics" (the study of individual economic units), "macroeconomics" (the study of the overall economy), "aggregate" (a whole formed by combining several elements), and "usability" (the ease of use or suitability of something). Therefore, the correct answer is "specificity."

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  • 5. 
    Period of time with no fixed factors of production or all factors are variable - ProProfs

    Period of time with no fixed factors of production or all factors are variable

    • Long run

    • Short run

    • Dry run

    • Recession

    • Overtime

    • Business cycle

    Correct Answer
    A. Long run
    Explanation
    The long run refers to a period of time where all factors of production are variable and can be adjusted. In this period, there are no fixed factors of production, meaning that all inputs can be changed. Firms have the flexibility to adjust their production levels, expand or contract their operations, and make long-term decisions such as investing in new machinery or entering new markets. It is a time frame where businesses have more control over their operations and can make strategic decisions to optimize their performance.

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  • 6. 
    The difference between the total revenue received by a firm and the total opportunity cost of production - ProProfs

    The difference between the total revenue received by a firm and the total opportunity cost of production

    • Economic profit

    • Accounting profit

    • Sunk cost

    • Cost of production

    • Total revenue

    • Total sales

    Correct Answer
    A. Economic profit
    Explanation
    Economic profit refers to the difference between the total revenue received by a firm and the total opportunity cost of production. It takes into account not only the explicit costs, such as wages and rent, but also the implicit costs, such as the opportunity cost of using the firm's resources in an alternative use. In contrast, accounting profit only considers the explicit costs and does not account for the opportunity cost. Therefore, economic profit provides a more comprehensive measure of a firm's profitability. Sunk cost refers to a cost that has already been incurred and cannot be recovered. Cost of production refers to the expenses incurred in the process of producing goods or services. Total revenue and total sales both refer to the total amount of money received from selling goods or services.

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  • 7. 
    A concept in economics that if one factor of production (number of workers, for example) is increased while other factors (machines and workspace, for example) are held constant, the output per unit of the variable factor will eventually decline.   - ProProfs

    A concept in economics that if one factor of production (number of workers, for example) is increased while other factors (machines and workspace, for example) are held constant, the output per unit of the variable factor will eventually decline.  

    • Law of diminishing returns

    • Law of supply and demand

    • TR and TC approach

    • MR and MC approach

    • Law of diminishing marginal utility

    • Posiitve and normative economics

    Correct Answer
    A. Law of diminishing returns
    Explanation
    The concept described in the question is known as the law of diminishing returns. According to this law, if one factor of production is increased while keeping other factors constant, the output per unit of the variable factor will eventually decline. This means that as more workers are added to a fixed amount of machines and workspace, the additional output gained from each additional worker will decrease over time. This concept is important in understanding the relationship between inputs and outputs in production processes.

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  • 8. 
     a relationship or situation in which two or more different things improve or emphasize each other's qualities. - ProProfs

     a relationship or situation in which two or more different things improve or emphasize each other's qualities.

    • Complementarity

    • Susbtitutability

    • Specifity

    • Reliability

    • Dependability

    • Replaceability

    • Specialization

    Correct Answer
    A. Complementarity
    Explanation
    Complementarity refers to a relationship or situation where two or more different things enhance or highlight each other's qualities. It implies that these elements are mutually beneficial and work together to create a more complete or effective outcome. Complementarity suggests a harmonious and synergistic interaction between different entities, where their unique strengths or characteristics complement and reinforce each other.

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  • 9. 
    A term used in economic analysis that describes the demand placed on one good or service as a result of changes in the price for some other related good or service. - ProProfs

    A term used in economic analysis that describes the demand placed on one good or service as a result of changes in the price for some other related good or service.

    • Derived demand

    • Aggregate demand

    • Excess demand

    • Shortage

    • Surplus

    • Surplus

    • Demand schedule

    • Demand schedule

    Correct Answer
    A. Derived demand
    Explanation
    Derived demand is a term used in economic analysis to describe the demand placed on one good or service as a result of changes in the price for some other related good or service. This means that the demand for a particular product or service is dependent on the demand for another related product or service. For example, if the price of a car increases, the demand for car insurance may also increase, as people may be more inclined to protect their expensive investment. Therefore, the correct answer is derived demand.

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  • 10. 
    A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs. - ProProfs

    A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

    • Productivity

    • Effectivity

    • Distribution

    • Production

    • Labor

    • Empployment

    Correct Answer
    A. Productivity
    Explanation
    Productivity refers to the measure of how efficiently a person, machine, factory, system, etc., can convert inputs into useful outputs. It indicates the level of efficiency and effectiveness in utilizing resources to generate desired outcomes. In other words, productivity measures the ability to produce more output with the same or fewer inputs, thereby maximizing efficiency and output.

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  • 11. 
    It refers to interaction between buyers and sellers of inputs. - ProProfs

    It refers to interaction between buyers and sellers of inputs.

    • Factor market

    • Goods market

    • Capital market

    • Money market

    • Stock market

    • Labor market

    Correct Answer
    A. Factor market
    Explanation
    The correct answer is factor market. This term refers to the interaction between buyers and sellers of inputs, such as labor, capital, and land. In the factor market, individuals and businesses buy and sell these inputs to produce goods and services. This market determines the prices and quantities of factors of production, which are essential for the production process.

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  • 12. 
    Concept which shows how inputs are converted into output - ProProfs

    Concept which shows how inputs are converted into output

    • Production function

    • Factors of production

    • Economic resources

    • Circular flow

    • Stages of production

    • Full employment

    Correct Answer
    A. Production function
    Explanation
    A production function is a concept that shows how inputs, such as labor, capital, and raw materials, are converted into output. It represents the relationship between the inputs and the resulting output in a production process. By understanding the production function, businesses can determine the most efficient way to allocate their resources and optimize their production levels.

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  • 13. 
     It is the additional cost incurred by employing one more unit of the input. It is calculated by the change in total cost divided by the change in the number of inputs. - ProProfs

     It is the additional cost incurred by employing one more unit of the input. It is calculated by the change in total cost divided by the change in the number of inputs.

    • Marginal resource cost

    • Marginal resource procduct

    • Variable cost

    • Fixed cost

    • Marginal revenue

    • Marginal revenue

    • Marginal cost

    • Marginal cost

    Correct Answer
    A. Marginal resource cost
    Explanation
    The correct answer is "marginal resource cost". Marginal resource cost refers to the additional cost incurred when employing one more unit of input. It is calculated by dividing the change in total cost by the change in the number of inputs. This concept is important in determining the optimal level of input usage and helps businesses make decisions regarding resource allocation and production levels.

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  • 14. 
    A change in the productivity of labor will change the demand of a firm for labor in the _______ - ProProfs

    A change in the productivity of labor will change the demand of a firm for labor in the _______

    • Same direction

    • Opposite direction

    • Upward direction

    • Downward direction

    • Rightward shift

    • Leftward shift

    Correct Answer
    A. Same direction
    Explanation
    When there is a change in the productivity of labor, it will directly affect the demand for labor in the same direction. If the productivity increases, the firm will demand more labor to take advantage of the increased efficiency. Conversely, if the productivity decreases, the firm will demand less labor as it becomes less efficient. Therefore, the change in productivity and the demand for labor will always move in the same direction.

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  • 15. 
     It is the extra revenue generated when an additional worker is employed - ProProfs

     It is the extra revenue generated when an additional worker is employed

    • Marginal resource product

    • Marginal resource cost

    • Marginal cost

    • Marginal revenue

    • Total revenue

    • Average revenue

    Correct Answer
    A. Marginal resource product
    Explanation
    The marginal resource product refers to the additional revenue generated when an additional worker is employed. This means that for each additional worker hired, there is an increase in the revenue generated by the company. It is important for companies to consider the marginal resource product when making hiring decisions, as it helps determine the optimal number of workers to employ in order to maximize revenue.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 12, 2018
    Quiz Created by
    Alston Christopher
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