This quiz works best with JavaScript enabled. Home > Agriculture > Economics > Production > Production Economics – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Production Economics Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The initiative and creativity to produce something new describes which factor of production? A) Land. B) Labor. C) Capital. D) Entrepreneur. Show Answer Correct Answer: D) Entrepreneur. 2. What is the term for a person who purchases goods and services for personal use? A) Demander. B) Consumer. C) Borrower. D) Supplier. Show Answer Correct Answer: B) Consumer. 3. Why would a producer want to increase the productivity of his/her workers? A) To increase profits. B) To increase costs. C) To decrease profits. D) To decrease costs. Show Answer Correct Answer: D) To decrease costs. 4. In which of the following situations would a business be wise to shut down (close) its factory? A) When total costs exceed marginal costs. B) When fixed costs exceed revenue. C) When revenue exceeds variable costs. D) When marginal costs exceed fixed costs. Show Answer Correct Answer: B) When fixed costs exceed revenue. 5. Production function shows the technological relationship between ..... A) Owner and Manager. B) Owner and Labor. C) Manager and Labor. D) Inputs and Output. Show Answer Correct Answer: D) Inputs and Output. 6. The best definition of fixed costs are those that do not vary with: A) Number of workers. B) Seasons. C) Time. D) Output. Show Answer Correct Answer: D) Output. 7. An example of natural resource. A) Tractor. B) Grill. C) Tree. D) Trade off. Show Answer Correct Answer: C) Tree. 8. The definition of Scarcity is ..... A) An unlimited amount of resources to meet limited wants and needs. B) A limited amount of resources to meet unlimited wants and needs. C) When people use time and energy to create events. D) A city where individuals commit themselves to unlimited wants and needs. Show Answer Correct Answer: B) A limited amount of resources to meet unlimited wants and needs. 9. As one of the factors of production/productive resources, capital can be defined as A) The goods and services a business produces. B) The supply of labor needed to produce goods. C) The people that purchase goods and services. D) The equipment and factories needed to produce goods. Show Answer Correct Answer: D) The equipment and factories needed to produce goods. 10. What is the term for the total supply of a specific good or service available to consumers? A) Scarcity. B) Demand. C) Interdependence. D) Supply. Show Answer Correct Answer: D) Supply. 11. An opportunity cost is A) The most desirable alternative given up as the result of a decision. B) Any good or service we barter for another good or service. C) The cost in dollars and time of any decision. D) A choice between two equally desirable goods or services. Show Answer Correct Answer: A) The most desirable alternative given up as the result of a decision. 12. Scarcity of resources forces nations, businesses and people to make A) Trades. B) Choices. C) Barters. D) Problems. Show Answer Correct Answer: B) Choices. 13. The United States decides what goods to produce by letting A) Only the government decide. B) The producers and the government decide. C) Only the producers decide. D) The producers and consumers decide. Show Answer Correct Answer: D) The producers and consumers decide. 14. Which of the following is a fixed cost for owning a vehicle? A) Gas. B) Oil Change. C) Car Payment. D) Tires. Show Answer Correct Answer: C) Car Payment. 15. A Pizza Oven is an example of ..... A) Entrepreneurship. B) Capital Resources. C) Human Resources. D) Natural Resources. Show Answer Correct Answer: B) Capital Resources. 16. Your garbage man is an example of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: B) Labor. 17. Capital in Economics is defined as ..... A) The cash in bank a firm has. B) The amount borrowed by the firm. C) The amount invested in the firm. D) The man-made items used in production. Show Answer Correct Answer: D) The man-made items used in production. 18. An increase in total production due to an increase of one unit of variable input is known as ..... A) Average cost. B) Average product. C) Marginal product. D) Marginal cost. Show Answer Correct Answer: C) Marginal product. 19. The computers you are using are examples of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: D) Capital. 20. The market value of all the inputs a firm uses in production. A) Marginal Costs. B) Explicit Costs. C) Implicit Costs. D) Total Costs. Show Answer Correct Answer: D) Total Costs. 21. The term production in economics means- A) Creation of economic utilities. B) Rendering of a service only. C) Creation of a physical product only. D) None of the above. Show Answer Correct Answer: A) Creation of economic utilities. 22. An external economy of scale is when A) Average costs fall as a result of the expansion of the industry as a whole. B) Firms can bulk buy. C) Costs rise for firms that are in competition with each other. D) None of above. Show Answer Correct Answer: A) Average costs fall as a result of the expansion of the industry as a whole. 23. Which best of the following best describes economics as a social and an applied science? A) The study of human personalities. B) The study of how customer make choices when there is unlimited supply of resources. C) The study of how buyers make choices when there is limited supply. D) The study of products we need to survive. Show Answer Correct Answer: B) The study of how customer make choices when there is unlimited supply of resources. 24. Your cafeteria cook is an example of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: B) Labor. 25. Things that you use for your survival are called A) Needs. B) Wants. C) Resources. D) Factors of production. Show Answer Correct Answer: A) Needs. 26. Labor refers to ..... A) People with all their efforts and abilities. B) Individuals who start a new business or bring a product to market. C) The tools, equipment, and factories used in production of goods and services. D) The "gifts of nature" or natural resources not created by human effort. Show Answer Correct Answer: A) People with all their efforts and abilities. 27. Land includes ..... A) The "gifts of nature" or natural resources not created by human effort. B) The tools, equipment, and factories used in production of goods and services. C) People with all their efforts and abilities. D) Individuals who start a new business or bring a product to market. Show Answer Correct Answer: A) The "gifts of nature" or natural resources not created by human effort. 28. Which of the following costs are generally assumed to be fixed? A) Rent. B) Wages for employees. C) Transportation expenses. D) Utilities. Show Answer Correct Answer: A) Rent. 29. Which of the following is NOT a reason for Depreciation (aka Capital Consumption Allowance) occurring? A) Capital goods become technologically inferior. B) Capital goods are damaged or destroy by natural disasters. C) Foreign manufacturers produce more capital goods than domestic manufacturers. D) Capital goods exceed their useful life (meaning they know longer can produce goods). Show Answer Correct Answer: C) Foreign manufacturers produce more capital goods than domestic manufacturers. 30. In the short run, when factors such as capital are fixed, variable factors tend to show an initial phase of increasing marginal product followed by diminishing marginal product. The corresponding cost curves show an initial phase of declining marginal costs, followed by increasing MC after diminishing returns have set in. A) It depends. B) False. C) Contradictory. D) True. Show Answer Correct Answer: D) True. ← PreviousNext →Related QuizzesEconomics QuizzesAgriculture QuizzesProduction Economics Quiz 1Production Economics Quiz 2Production Economics Quiz 3Production Economics Quiz 4Production Economics Quiz 6Production Economics Quiz 7Production Economics Quiz 8Production Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books