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Questions and Answers
What does the theory of production in economics aim to explain?
What does the theory of production in economics aim to explain?
- How much of each commodity a firm will produce and how much of each input it will use (correct)
- How much a firm will charge for its outputs and inputs
- How much profit a firm will make from its outputs and inputs
- How much a firm will invest in new technologies for production
What is the process of production?
What is the process of production?
- Creating utility by transforming input into output (correct)
- Setting the prices of commodities and productive factors
- Maximizing expenditure on inputs for any level of output
- Minimizing output for any level of expenditure on inputs
What does the production function refer to?
What does the production function refer to?
- The relationship between a firm's market share and its advertising expenditure
- The relationship between a firm's profit and its investment in technology
- The relationship between a firm's revenue and its production costs
- The functional relationship between the quantity of a good produced and factors of production (correct)
What does the theory of production involve?
What does the theory of production involve?
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What do firms attempt to do in terms of production?
What do firms attempt to do in terms of production?
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