The production function is a mathematical function that shows:
A) the most cost efficient means of producing output.
B) the relationship between inputs and the quantity of output produced.
C) how various inputs are produced.
D) the most efficient level of output produced in an economy.
Answer: B) the relationship between inputs and the quantity of output produced.
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What is deadweight loss?
a. It is the amount of surplus that consumers lose due to monopoly. b. It is the amount of surplus that producers lose due to perfect competition. c. It is the amount of surplus which is completely lost to society due to monopoly. d. It is the amount of surplus which was earned by consumers under perfect competition and is transferred to producers due to monopoly.
In the market for insurance, the adverse selection problem leads a. those most likely to collect on insurance to buy it
b. those who buy insurance to take fewer precautions to avoid the insured risk. c. those with less insurance to take on more risk. d. to none of the above.
If money demand shifted to the right and the Federal Reserve desired to return the interest rate to its original value, it could
a. buy bonds to increase the money supply. b. buy bonds to decrease the money supply. c. sell bonds to increase the money supply. d. sell bonds to decrease the money supply.
Market economy vs. command economy
What will be an ideal response?