Production And Factor Market
-
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
-
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.
Quiz Preview
- 2.
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 runExplanation
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.Rate this question:
-
- 3.
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 profitExplanation
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.Rate this question:
-
- 4.
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 capitalExplanation
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.Rate this question:
-
- 5.
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 functionExplanation
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.Rate this question:
-
- 6.
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. SubstitutabilityExplanation
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.Rate this question:
-
- 7.
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. ComplementarityExplanation
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.Rate this question:
-
- 8.
The quality of being exact rather than general. Synonyms: specialness.
-
Specificity
-
Duplicity
-
Microeconomics
-
Macroeconomics
-
Aggregate
-
Usability
Correct Answer
A. SpecificityExplanation
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."Rate this question:
-
- 9.
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 returnsExplanation
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.Rate this question:
-
- 10.
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 demandExplanation
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.Rate this question:
-
- 11.
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. ProductivityExplanation
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.Rate this question:
-
- 12.
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 marketExplanation
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.Rate this question:
-
- 13.
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 productExplanation
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.Rate this question:
-
- 14.
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 directionExplanation
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.Rate this question:
-
- 15.
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 costExplanation
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.Rate this question:
-
Quiz Review Timeline (Updated): Mar 21, 2023 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
-
Current Version
-
Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Feb 12, 2018Quiz Created by
Alston Christopher
Back to top