Production Function in Economics

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Questions and Answers

What is the production function defined as?

  • A factor of production
  • A technological relationship between inputs and capital
  • A relationship between output and inputs at a given period of time (correct)
  • A law of diminishing returns

What is the general form of the production function?

  • Q = f (L, K, E, P)
  • Q = f (L, K, E, T)
  • Q = f (L, K, E)
  • Q = f (Land, Labour, Capital, Entrepreneur) (correct)

What is the short-run production function based on?

  • Law of diminishing returns (correct)
  • Law of opportunity cost
  • Law of supply and demand
  • Law of increasing returns

What is the main difference between the short-run and long-run production functions?

<p>At least one of the factors of production is fixed in the short-run (D)</p> Signup and view all the answers

What is the role of entrepreneur in the production function in Economics?

<p>It is infused into capital (B)</p> Signup and view all the answers

What is the symbolically represented short-run production function?

<p>Q = f (L, K) (C)</p> Signup and view all the answers

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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).

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