Factors of Production Overview

<p>The quality and efficiency of labor varies significantly among individuals. (B)</p> Signup and view all the answers

<p>The inelastic supply of labor restricts employment options. (C)</p> Signup and view all the answers

<p>Labor cannot be easily increased or decreased based on immediate needs. (B)</p> Signup and view all the answers

<p>It consists of natural resources and is immobile. (C)</p> Signup and view all the answers

<p>At least one factor must remain fixed. (B)</p> Signup and view all the answers

<p>TP increases until it reaches a maximum, then declines. (B)</p> Signup and view all the answers

<p>14 (A)</p> Signup and view all the answers

<p>Variable factors can be homogenous. (B)</p> Signup and view all the answers

<p>Stage III (D)</p> Signup and view all the answers

<p>0 (A)</p> Signup and view all the answers

<p>Capital (A)</p> Signup and view all the answers

<p>TP increases at an increasing rate. (C)</p> Signup and view all the answers

<p>The law of variable factor proportion. (C)</p> Signup and view all the answers

<p>Replacement cost indicates the current cost for acquiring a similar asset. (A)</p> Signup and view all the answers

<p>Fixed costs remain constant regardless of the level of output in the short run. (D)</p> Signup and view all the answers

<p>By subtracting total cost of the previous unit from the current total cost. (B)</p> Signup and view all the answers

<p>All costs become variable as the scale of production increases. (A)</p> Signup and view all the answers

<p>The sum of explicit and implicit costs associated with producing output. (D)</p> Signup and view all the answers

<p>Nominal cost refers only to visible money expenses, whereas real cost also considers opportunity costs. (B)</p> Signup and view all the answers

<p>The value of resources used in production that are self-owned and not directly compensated. (D)</p> Signup and view all the answers

<p>Economic cost is always higher than accounting cost due to the inclusion of implicit costs. (B)</p> Signup and view all the answers

<p>Payments made to hired resources which can be directly accounted for. (C)</p> Signup and view all the answers

<p>Production cost (A)</p> Signup and view all the answers

<p>The loss of potential income from a job when starting a new business. (B)</p> Signup and view all the answers

<p>Additional costs resulting from a decision or action. (B)</p> Signup and view all the answers

<p>Rent for the factory space. (B)</p> Signup and view all the answers

<p>The cost of producing one additional unit of output. (B)</p> Signup and view all the answers

<p>Historical costs are incurred in the past; replacement costs reflect current market conditions. (A)</p> Signup and view all the answers

<p>Costs that do not have a direct relationship with the production process (B)</p> Signup and view all the answers

<p>The value of an alternative crop not grown on land used for rice production (C)</p> Signup and view all the answers

<p>Social costs include external costs to society that arise from production (C)</p> Signup and view all the answers

<p>Sunk costs include past costs that do not change with future decisions (D)</p> Signup and view all the answers

<p>The additional costs associated with changes in business activity (A)</p> Signup and view all the answers

<p>Depreciation on equipment used in production (D)</p> Signup and view all the answers

<p>Historical expenditures recorded in financial statements (D)</p> Signup and view all the answers

<p>Environmental damage caused by industrial pollution (B)</p> Signup and view all the answers

<p>It allows for the assessment of all possible alternatives (B)</p> Signup and view all the answers

Resources used to produce goods and services in an economy.

Natural resources like oil, gold, wood, water, and vegetation.

The physical or mental effort exerted to produce goods or services.

Man-made resources (machinery, equipment) used for further production.

The individual who combines the other factors of production to create a good or service.

Cannot be moved from one place to another.

Labor's time cannot be recovered if not used.

A production law stating that as the amount of a variable input is increased, while holding other inputs constant, the marginal product of the variable input will eventually decrease.

An input to production that cannot be changed in the short run.

An input to production that can be changed in the short run.

The total output produced by a given combination of inputs.

Total product divided by the number of units of the variable input.

The additional output produced when one more unit of a variable input is added.

A period of time in which at least one input is fixed.

The different phases of output as variable inputs increase.

Variable input units are identical in quality and productivity.

The money cost of production, including payments for resources and raw materials.

The total cost of producing a good or service, including all resources used, like time and opportunity costs.

Payments made to external resources used in production, like wages or rent.

The cost of using self-owned resources, like the value of an entrepreneur's time.

Explicit costs, the monetary costs accounted for in a business's records.

Total cost of production, including explicit and implicit costs.

Costs that remain constant regardless of production level.

Costs that change with production level.

Costs that can be directly traced to a specific project or product.

The value of the next best alternative forgone when a choice is made.

The original price paid for an asset when it was first acquired. It's used to determine the value of the asset for accounting purposes.

The current market price you'd pay to buy the same asset today, even if you already own it.

The extra cost of producing one more unit of a good or service.

The total cost a company incurs to acquire inputs or produce a product. Includes all expenses recorded in the company's financial statements.

Costs incurred by a company to produce a good or service, including both explicit and implicit costs.

The cost imposed on society by the production of a good or service, not borne by the company itself. Examples include pollution or traffic congestion.

The additional cost of making a change to a business activity, such as adding a new product line or expanding production.

Costs that have already been incurred and cannot be recovered. They should be ignored when making future decisions.