This quiz works best with JavaScript enabled. Home > Agriculture > Economics > Production > Production Economics – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Production Economics Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. There are very little personal freedoms when it comes to resources and decisions about what to sell and how to sell it.Which economic system does this represent? A) Mixed. B) Command. C) Traditional. D) Market. Show Answer Correct Answer: B) Command. 2. A country produces $ 12 billion worth of goods, $ 7 billion worth of services overall. If the amount they spent on depreciation is $ 380 million, what is the country's NNP? A) $ 84 billion. B) $ 18.62 billion. C) $ 19 billion. D) $ 5 billion. Show Answer Correct Answer: B) $ 18.62 billion. 3. An individual's knowledge or skills that make production of a good/service more efficient A) Enterprise Capital. B) Investment Capital. C) Physical Capital. D) Human Capital. Show Answer Correct Answer: D) Human Capital. 4. A delivery driver A) Natural Resource. B) Capital Resource. C) Entrepreneurship. D) Human Resource. Show Answer Correct Answer: D) Human Resource. 5. The best definition of economies of scale is A) Average revenue rises as output rises. B) Total costs rise as output increases. C) Total costs fall as output rises. D) Average cost falls as the scale of output increases. Show Answer Correct Answer: D) Average cost falls as the scale of output increases. 6. Which of the following is NOT one of the 3 Basic Economic questions? A) When to Produce. B) What To Produce. C) How to Produce. D) For Whom To Produce. Show Answer Correct Answer: A) When to Produce. 7. How do you satisfy your unlimited wants in a world of limited resources? A) By making choices. B) By making more money. C) By stealing. D) By setting a budget. Show Answer Correct Answer: A) By making choices. 8. Which should not be considered as capital? A) A razor used by a barber. B) A crane used by a building contractor. C) An automobile used by a person. D) A share of corporate stock. Show Answer Correct Answer: D) A share of corporate stock. 9. The pattern of demand for silk and gold by men should be ..... A) Zero. B) Decrease to one. C) Infinitive. D) More than zero but less than one. Show Answer Correct Answer: A) Zero. 10. A herd of cattle is an example of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: A) Land. 11. The break-even level of output is that number of units where: A) Profit is at its highest level. B) Variable costs equal fixed costs. C) Total costs equal revenue. D) Variable costs equal revenue. Show Answer Correct Answer: C) Total costs equal revenue. 12. What is classified as one of the four economic resources? A) Enterprise. B) Consumption. C) Trade. D) Production. Show Answer Correct Answer: A) Enterprise. 13. This factor involves money, equipment, and tools and any items to produce goods and services? A) Capital. B) Entrepreneur. C) Land. D) Labor. Show Answer Correct Answer: A) Capital. 14. When the amount of a factor increases the total output A) Increases. B) Is maximum. C) Decreases. D) Becomes zero. Show Answer Correct Answer: A) Increases. 15. In determining the optimal level of output, a firm should aim for the A) Point where decreasing returns become negative returns. B) Output level where marginal returns are still increasing. C) Point of maximum profitability for the company. D) Output level where fixed costs exceed variable costs. Show Answer Correct Answer: C) Point of maximum profitability for the company. 16. Entrepreneurs are considered a factor of production because? A) They are land owners. B) They are great workers at factories. C) Provide money by investing. D) They create companies and foster business innovation by having creative ideas. Show Answer Correct Answer: D) They create companies and foster business innovation by having creative ideas. 17. Capital refers to A) The "gifts of nature" or natural resources not created by human effort. B) People with all their efforts and abilities. C) The tools, equipment, and factories used in production of goods and services. D) Individuals who start a new business or bring a product to market. Show Answer Correct Answer: C) The tools, equipment, and factories used in production of goods and services. 18. The enterprising spirit that allows an individual to spot gaps in the market and take risks (including starting a business): A) Entrepreneurship. B) Capital. C) Land. D) Labor. Show Answer Correct Answer: A) Entrepreneurship. 19. What does the saying "There is no free lunch" mean? A) Some things cost nothing. B) Most things cost nothing. C) Everything costs something. D) Most things cost something. Show Answer Correct Answer: C) Everything costs something. 20. Harvesting less corn than the land is capable of producing is an example of A) Marginal costs. B) Opportunity costs. C) Underutilization. D) Efficiency. Show Answer Correct Answer: C) Underutilization. 21. The most basic economic problem that forces us to make choices is ..... A) The lack of money. B) The shortage of goods. C) Scarcity. D) The lack of skills. Show Answer Correct Answer: C) Scarcity. 22. Total Revenue - Total Cost = ..... A) Revenue. B) Variable Revenue. C) Marginal Revenue. D) Profit. Show Answer Correct Answer: D) Profit. 23. What is a risk an entrepreneur takes in running a business? A) Losing the money invested in starting the business. B) Going bankrupt [losing everything]. C) Not having a steady job/paycheck. D) All of these are risks!. Show Answer Correct Answer: D) All of these are risks!. 24. What is not a reason for the decline in manufacturing industries in developed economies in recent years? A) Growth of newly industrialised competitor countries. B) Considerable skill shortages as school-leavers prefer to work in the service sector. C) Rising costs of factor inputs in the steel industry. D) Invention of automated production methods. Show Answer Correct Answer: D) Invention of automated production methods. 25. Bill Gates is an example of ..... A) Land (seriously though, come on). B) Labor. C) An Entrepreneurs. D) Capital. Show Answer Correct Answer: C) An Entrepreneurs. 26. Profit is equal to: A) Total revenue - Total cost. B) Total Cost - Total revenue. C) Revenue + Fixed costs. D) Fixed cost + variable cost - total revenue. Show Answer Correct Answer: A) Total revenue - Total cost. 27. The short run is a time period A) Which is less than 3 months. B) Which is very short. C) In which there is at least 1 fixed factor. D) In which all factors are variable. Show Answer Correct Answer: C) In which there is at least 1 fixed factor. 28. Anything within the production process, whether human or technological, that makes production more efficient A) Entrepreneurship. B) Capital. C) Land. D) Labor. Show Answer Correct Answer: B) Capital. 29. Objects that can be purchased. A) Services. B) Objects. C) Goods. D) Products. Show Answer Correct Answer: C) Goods. 30. In the SHORT RUN, what is true? A) AVC declines as output is expanded. B) Variable cost will exceed total cost. C) If inputs are increased, output will expand by a diminishing amount. D) All inputs are variable. Show Answer Correct Answer: C) If inputs are increased, output will expand by a diminishing amount. Next →Related QuizzesEconomics QuizzesAgriculture QuizzesProduction Economics Quiz 2Production Economics Quiz 3Production Economics Quiz 4Production Economics Quiz 5Production Economics Quiz 6Production Economics Quiz 7Production Economics Quiz 8Production Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books