6 Questions
What is the production function defined as?
A relationship between output and inputs at a given period of time
What is the general form of the production function?
Q = f (Land, Labour, Capital, Entrepreneur)
What is the short-run production function based on?
Law of diminishing returns
What is the main difference between the short-run and long-run production functions?
At least one of the factors of production is fixed in the short-run
What is the role of entrepreneur in the production function in Economics?
It is infused into capital
What is the symbolically represented short-run production function?
Q = f (L, K)
Study Notes
Production Function
- The production function represents a technological relationship between output and inputs at a given point in time.
- The production function can be expressed mathematically as: Q = f (Land, Labour, Capital, Entrepreneur)
- In Economics, the production function typically excludes entrepreneur, which is instead incorporated into capital.
Two-Factor Inputs
- There are two primary factor inputs that determine output: Labour (L) and Capital (K)
- The two-factor production function can be expressed as: Q = f (L, K)
Short-Run Production Function
- The short-run production function is a period of time where at least one factor of production is fixed, while others vary with the level of output.
- The short-run production function is based on the assumption of the law of diminishing returns.
- The short-run production function can be expressed symbolically as: Q = f (L, K)
- In this context, L represents labor (variable input), and K represents capital (fixed input).
This quiz is about the production function, a technological relationship between output and inputs in economics. It covers the factors of production and how they determine output.
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