Question

The relationship between a firm's level of output and level of inputs is given by... economic costs. a marginal cost curve. a production possibilities frontier. the production function. an average cost curve.

Answer 1

1. Answer: The production function

Production function shows the relationship between the quantity of physical output and the different quantities of inputs (factors of production) used in the production process.

2. Answer: All inputs are variable

In the long run, all factors of production and costs are variable. Firms have sufficient period of time for all inputs to become variable and are able to adjust all costs.

3. Answer: None of these

Marginal cost of wheat is the additional made to the total cost by producing one more additional bushel of wheat.

4. Answer: Fixed costs

Fixed cost remains constant throughout the level of production. The cost incurred at zero level of output is called fixed cost.