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Questions and Answers
What does the law of diminishing marginal product state?
What does the law of diminishing marginal product state?
The short run is defined as the period when all factors of production are variable.
The short run is defined as the period when all factors of production are variable.
False
What is the average product when 5 units of variable inputs are used?
What is the average product when 5 units of variable inputs are used?
10
In the short run, a firm increases production by employing more units of the _____ inputs.
In the short run, a firm increases production by employing more units of the _____ inputs.
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Match the terms with their definitions:
Match the terms with their definitions:
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Which of the following best describes the long run in production?
Which of the following best describes the long run in production?
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The average product is calculated by dividing total product by the number of variable inputs used.
The average product is calculated by dividing total product by the number of variable inputs used.
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What happens to the marginal product after the first unit of variable input according to the law of diminishing returns?
What happens to the marginal product after the first unit of variable input according to the law of diminishing returns?
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The production function shows the relationship between _____ and output.
The production function shows the relationship between _____ and output.
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What is indicated by a negative marginal product?
What is indicated by a negative marginal product?
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Study Notes
Production Function
- Average Product: Total product divided by the number of units.
- Marginal Product: Change in total product divided by the change in the number of units.
- Production functions can be represented as tables or graphs.
- The table shows the relationship between variable inputs (e.g., labor) and total product.
- Examples are in the table (Units of variable inputs L, Total product, Average product, Marginal product).
- Graphs illustrate the relationship visually (total product, average product, and marginal product plotted against the units).
- Short Run vs. Long Run: These concepts are not tied to a specific duration in time. They refer to the flexibility of input adjustments.
Short Run vs. Long Run
- Short Run: At least one factor of production is fixed (e.g., capital, land). Variable factors (labor) can be adjusted to increase production.
- Diminishing Marginal Returns: As more variable inputs are added to a fixed input, the marginal product eventually declines.
- Long Run: All factors of production are variable. Time is sufficient to adjust all inputs.
- Returns to Scale: Changes in output when all factors of production are proportionally altered.
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Description
This quiz assesses your understanding of production functions, including average and marginal product calculations. It also explores the differences between short run and long run production scenarios. Test your knowledge on how these concepts are visually represented and their implications in production economics.
