Question

d. All of the above are correct.
True/False Quiz
1. The production function is an equation, table, or graph that shows the maximum output
that can be produced from different combinations of inputs.
a. True
b. False
2. Production refers to all activities involved in the production of goods and services.
a. True
b. False
3. Fixed inputs are those that can never be changed.
a. True
b. False
4. All inputs are variable in the long run.
a. True
b. False
5. All inputs are fixed in the short run.
a. True​

Answer 1

Answer:

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Explanation:

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Answer 2

Answer:

1. True
2. True
3. False
4. True
5. False

Explanation:

1. The production function is an equation, table, or graph that shows the maximum output that can be produced from different combinations of inputs.

a. True

Explanation:

• The production function is a function or table that shows the maximum amount of output that can be produced from various levels of inputs.
• Many different inputs can be used in production, in economics, a simplified version of the production function with two inputs (labor and capital) is used.

2. Production refers to all activities involved in the production of goods and services.

a. True

• Production is an economic activity involving the production of goods as well as services.
• Goods are tangible as we can see, touch and feel them. But, services are intangible as we can only feel them.
• Manufacturing of cosmetics is an example of the production of goods, whereas a beauty parlour giving beauty treatment is an example of production of services.

3. Fixed inputs are those that can never be changed.

False

Explanation

• A fixed input is a resource or factor of production which cannot be changed in the short run by a firm as it seeks to change the quantity of output produced. Most firms have several fixed inputs in short-run production, especially buildings, equipment, and land.

4. All inputs are variable in the long run.

True

Explanation

• In the long run, firms have the opportunity to expand production by purchasing more machinery, factories etc. These are factors that may be considered fixed in the short run due to the time period that it takes to obtain finances or build the machinery or construct infrastructure.
• However, in the long run these factors are taken care of and thus they can be considered variable factors as there are no limitations.

5. All inputs are fixed in the short run.

False

Explanation

• According to the short run, the behaviors of a firm or an economy will vary depending on the time available for a company to react to inputs. The short run differs from the long run in that the short run has both fixed and variable inputs while the long run has no fixed inputs.