This quiz works best with JavaScript enabled. Home > Economics > Production Economics – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Production Economics Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What happens when there is a limited supply of one of the factors of production? A) It has no impact. B) It could cause the other factors to be in limited supply. C) Labor becomes less skilled. D) It causes the supply to go up for the product. Show Answer Correct Answer: B) It could cause the other factors to be in limited supply. 2. After more than 70 years of production, a German car manufacturer, Volkswagen, has decided to locate the production of its biggest selling car in developing countries, rather than Germany. What is the main advantage of this policy? A) To access new management techniques. B) To make use of better infrastructure. C) To sell the car only to customers in developing countries. D) To train and employ labor at a lower cost. Show Answer Correct Answer: D) To train and employ labor at a lower cost. 3. To increase marginal return, a company might consider A) Stopping production. B) Purchasing more machinery. C) Increasing output. D) Reducing output. Show Answer Correct Answer: B) Purchasing more machinery. 4. Extra cost of producing one more unit A) Marginal cost. B) Variable Cost. C) Fixed Cost. D) Average Cost. Show Answer Correct Answer: A) Marginal cost. 5. Efficiency along the PPC implies A) Goods are produced quickly. B) The state of technology is maximized. C) , In order to get more of a good, some of another must be given up. D) Goods are distributed equitably. Show Answer Correct Answer: C) , In order to get more of a good, some of another must be given up. 6. A microeconomist would study A) A general decline in prices. B) A rise in tea prices. C) The ups and downs of business cycles. D) The impact of national tax policies. Show Answer Correct Answer: B) A rise in tea prices. 7. Average product is at its maximum, when average variable cost is at its? A) Turning Point. B) Minimum. C) Maximum. D) Stable Point. Show Answer Correct Answer: B) Minimum. 8. How can you increase your human capital? A) Take an online class. B) Work an extra shift. C) Buy a car. D) Go to Sonic after school. Show Answer Correct Answer: A) Take an online class. 9. The main difference between the SR and the LR is that A) The law of diminishing returns applies in the LR. B) All resources are variable in the LR. C) Fixed costs are more important to decision making in the LR. D) In the SR all resources are fixed. Show Answer Correct Answer: B) All resources are variable in the LR. 10. The term, "capital goods" means: A) Goods not created for their own use, but to make other goods/services. B) Work the people do to produce goods and services. C) Person who organizes the factors of production to produce goods/services; business owners. D) The natural resources used to produce goods or services. Show Answer Correct Answer: A) Goods not created for their own use, but to make other goods/services. 11. A production function is an expression of ..... relation between inputs and outputs. A) Quantitative. B) Qualitative. C) Monetary. D) Economic. Show Answer Correct Answer: A) Quantitative. 12. When the total product is maximum, the marginal product is ..... A) Positive. B) Zero. C) Negative. D) Maximum. Show Answer Correct Answer: B) Zero. 13. Production is a very significant process in Islamic economics because A) Humans have been appointed by Allah as His khalifah to manage the earth and build civilization. B) Most of the raw materials created by Allah must be transformed into final goods and services before they are fit for consumption. C) Production activities are the main sources of income for humans to support their survival on earth and achieve falah. D) It contributes directly to the creation of wealth which the country needs to preserve social order and promote economic development. Show Answer Correct Answer: B) Most of the raw materials created by Allah must be transformed into final goods and services before they are fit for consumption. 14. In the long run, firms should decide to shut down if what condition holds? A) Price is less than both average cost and average variable cost. B) Price is less than both average cost. C) Price is less than average variable cost. D) Price is less than average fixed cost. Show Answer Correct Answer: A) Price is less than both average cost and average variable cost. 15. A Teacher is an example of A) Natural Resources. B) Human Resources. C) Capital Resources. D) Entrepreneurship. Show Answer Correct Answer: B) Human Resources. 16. The creation of any kind of good or service is known as: A) Input. B) Resources. C) Production. D) Entrepreneurship. Show Answer Correct Answer: C) Production. 17. Which is an example of entrepreneurship? A) Working for Wal-Mart. B) Being a member of the USWNT soccer team. C) Managing the Shell station for you friend. D) Creating a new product. Show Answer Correct Answer: D) Creating a new product. 18. The Chromebooks you are using are examples of (Think about the purpose of schools, and what they are trying to produce.) A) Land. B) Labor. C) Entrepreneurs. D) Capital. Show Answer Correct Answer: D) Capital. 19. Additional cost associated with producing one additional unit of output: A) Fixed Costs. B) Average Costs. C) Marginal Costs. D) Emplicit Costs. Show Answer Correct Answer: C) Marginal Costs. 20. The long-run ATC curve: A) Will rise if there are diminishing returns. B) Will fall if there are diminishing returns. C) Will rise if economies of scale are incurred. D) Is based on the assumption that all resources are variable. Show Answer Correct Answer: D) Is based on the assumption that all resources are variable. ← PreviousNext →Related QuizzesProduction Economics Quiz 1Production Economics Quiz 2Production Economics Quiz 3Production Economics Quiz 4Production Economics Quiz 5Production Economics Quiz 7Production Economics Quiz 8Production Economics Quiz 9Production Economics Quiz 10Production Economics Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books