This quiz works best with JavaScript enabled. Home > Economics > Production > Production Economics – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Production Economics Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An increase in total production due to an increase of one unit of variable input is known as ..... A) Marginal cost. B) Average cost. C) Marginal product. D) Average product. Show Answer Correct Answer: C) Marginal product. 2. The computers you are using are examples of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: D) Capital. 3. The market value of all the inputs a firm uses in production. A) Implicit Costs. B) Explicit Costs. C) Total Costs. D) Marginal Costs. Show Answer Correct Answer: C) Total Costs. 4. 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. 5. 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. 6. Which best of the following best describes economics as a social and an applied science? A) The study of products we need to survive. B) The study of how customer make choices when there is unlimited supply of resources. C) The study of human personalities. D) The study of how buyers make choices when there is limited supply. Show Answer Correct Answer: B) The study of how customer make choices when there is unlimited supply of resources. 7. Your cafeteria cook is an example of A) Land. B) Labor. C) Entrepreneurship. D) Capital. Show Answer Correct Answer: B) Labor. 8. 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. 9. 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. 10. 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. 11. Which of the following costs are generally assumed to be fixed? A) Utilities. B) Wages for employees. C) Rent. D) Transportation expenses. Show Answer Correct Answer: C) Rent. 12. 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. 13. Fixed cost A) Long run ATC rises as output increases. B) Long run ATC falls as output rises. C) Costs that do not vary with the quantity of output produced. D) Long run ATC stays the same as the quantity of output changes. Show Answer Correct Answer: C) Costs that do not vary with the quantity of output produced. 14. 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) False. B) It depends. C) True. D) Contradictory. Show Answer Correct Answer: C) True. 15. Total Costs / Quantity = ..... A) Marginal Cost. B) Average Total Cost. C) Implicit Cost. D) Explicit Cost. Show Answer Correct Answer: B) Average Total Cost. 16. A trained automobile mechanic would be an example of: A) Capital goods. B) Entrepreneurship. C) Human Capital. D) Natural Resources. Show Answer Correct Answer: C) Human Capital. 17. The people who work and contribute to the economy A) Natural Resources. B) Human Resources. C) Entrepreneurship. D) Capital Resources. Show Answer Correct Answer: B) Human Resources. 18. Adam Smith argued that a nation would be wealthier if it engaged in A) Mercantilism. B) Free trade. C) State-controlled mercantilism. D) State-controlled trade. Show Answer Correct Answer: B) Free trade. 19. The relationship between the factors of production and the output of goods and services. A) Marginal Product. B) Law of Variable Proportions. C) Production Function. D) Stages of Production. Show Answer Correct Answer: C) Production Function. 20. Which of the following inputs are variable in the long run? A) Labour. B) Capital and equipment. C) Plant size. D) All of above. Show Answer Correct Answer: D) All of above. ← PreviousNext →Related QuizzesEconomics QuizzesProduction Economics Quiz 1Production Economics Quiz 2Production Economics Quiz 3Production Economics Quiz 4Production Economics Quiz 5Production Economics Quiz 6Production Economics Quiz 7Production Economics Quiz 9Production Economics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books