Online Test — Production Function
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
Production means creating ____ to satisfy wants.
Utility (goods and services)
Money only
Scarcity
Demand
Explanation: Production creates utility by transforming inputs into output.
Question 2 of 15
Land, labour, capital and enterprise are the:
Outputs
Factors of production (inputs)
Products
Prices
Explanation: These are the four factors of production (inputs).
Question 3 of 15
The technical relationship between inputs and output is the:
Demand function
Production function
Cost function
Utility function
Explanation: It is the production function, Q = f(L, K).
Question 4 of 15
A period in which at least one factor is fixed is the:
Long run
Short run
Market period only
No period
Explanation: The short run has at least one fixed factor.
Question 5 of 15
In the long run, the number of fixed factors is:
One
Zero (all are variable)
Two
Many
Explanation: In the long run all factors can be varied — none are fixed.
Question 6 of 15
Total output produced by all units of the variable factor is:
Average product
Total product
Marginal product
Price
Explanation: That total is the total product (TP).
Question 7 of 15
Average product equals:
TP ÷ L
TP × L
Change in TP
TP + L
Explanation: AP = total product ÷ units of the variable factor.
Question 8 of 15
Marginal product is the:
Output per unit
Addition to TP from one more unit
Total output
Price of output
Explanation: MP is the change in TP from one more variable unit.
Question 9 of 15
If TP rises from 36 to 44 when labour rises from 3 to 4, MP of the 4th unit is:
8
44
36
11
Explanation: MP = 44 − 36 = 8.
Question 10 of 15
Total product is maximum when marginal product is:
Maximum
Zero
Negative
Rising
Explanation: TP is maximum where MP = 0.
Question 11 of 15
The MP curve cuts the AP curve at AP's:
Minimum
Maximum
Zero
Start
Explanation: MP intersects AP at the maximum point of AP.
Question 12 of 15
When MP is greater than AP, the AP is:
Rising
Falling
Constant
Zero
Explanation: AP rises while MP exceeds it.
Question 13 of 15
The law of variable proportions operates in the:
Short run
Long run
No run
Market period only
Explanation: It is a short-run law (one factor fixed).
Question 14 of 15
In Stage I (increasing returns), marginal product:
Rises
Falls
Is negative
Is zero
Explanation: MP rises in Stage I.
Question 15 of 15
In Stage III, total product:
Rises
Falls (MP negative)
Is constant
Is maximum
Explanation: In Stage III, MP is negative and TP falls.