Unit 5 Review Questions Answer скачать в хорошем качестве

Unit 5 Review Questions Answer

Review Questions Part I: Write “True” if the statement is correct or “False” if it is not correct for each of the following statements. 1. The concepts of production and costs are independent facts. 2. Production function is the technical relationship between inputs and outputs. 3. An input whose quantity can be changed during the short period under consideration is known as a fixed input. 4. Economic cost is the sum total of explicit cost and implicit cost. 5. Accounting cost refers to the cost of purchased inputs only. 6. When total product increases at an increasing rate, marginal product increases. 7. When marginal product is greater than average product, this means that average product is falling. 8. When marginal product equals average product, this means that average product is minimum. 9. Fixed costs are those costs that vary as the firm changes the level of output. 10. MC is the additional cost that a firm incurs to produce all units of output. Part II: Choose the correct answer among the alternatives for the following questions. 1. The process of using different factors of production in order to make goods and services available is known as: A . Investment B . Production C . Consumption D . Resource 2. Any good or service that comes out of a production process, is known as: A . Output B . Input C . Labour D . Economic resource 3. When the short-run marginal product of labour is negative: A . total product is also negative. B . Total products are rising, but at a diminishing rate. C . Total products are rising at an increasing rate. D . Total products are declining. 4. Suppose the average product of 6 workers is 150 units of a good and that of 7 workers is 170 units. The MP of the seventh worker equals: A . 200 B . 270 C . 290 D . 220 65 Unit 5: Introduction to Production and Cost 66 5. The supply of economic resources in the short run production that cannot change is A . Fixed inputs B . Variable inputs C . Labor and raw materials D . Average variable costs 6. Which of the following is/are not a good indicator or measure of output per unit input? A . Total product B . Average product C . Marginal Product D . Both A and C 7. A specific type of costs that are always incurred even if the firm does not produce anything. A . Accounting costs B . Variable costs C . Total cost D . Fixed costs 8. In the short-run, A . All costs are fixed B . All costs are marginal C . Some costs are fixed D . All costs are variable 9. Suppose output increases from 50 to 51 units and total cost increases from birr 260 to birr 293. The MC of the extra output is birr, A . 553 B . 226.5 C . 33 D . 29 Part III: Answer the following questions briefly and to the point. 1. Define production function. 2. Explain two types of production function based on time period of production. 3. Describe the relationship between the average product and the marginal product with the help of graph. 4. Describe the relationship between marginal product and total product with the help of graph 5. Explain the explicit and implicit cost