Final answer:
The statement that cost means the value of inputs used in the production process to a provider is true. Costs include variable inputs like labor and raw materials, which vary depending on the level of output.
Step-by-step explanation:
To a provider, cost means the value of inputs used in the production process. The answer to the student's question is a) True.
The cost of production for a given quantity of output is indeed the sum of the amount of each input required to produce that quantity of output times the associated factor payment. Factor payments include wages for labor, prices for raw materials, and other costs directly associated with the production of goods or services. With labor being a variable cost, it fluctuates with the output level since producing more typically requires additional workers or more work hours. Variable costs also include raw materials and any other inputs that change in direct proportion to the quantity of goods or services produced.