Question

Which of the following equations shows "production" being used correctly?

1. scarcity forces tradeoffs = production
2. costs + benefits = production
3. land + labor + production = capital
4. land + labor + capital = production

Answer 1

By the end of this section, you will be able to:

Understand the concept of a production function

Differentiate between the different types of inputs or factors in a production function

Differentiate between fixed and variable inputs

Differentiate between production in the short run and in the long run

Differentiate between total and marginal product

Understand the concept of diminishing marginal productivity