What relationship does a production function show?
A) the relationship between variable inputs and outputs
B) the relationship between variable inputs and fixed inputs
C) the relationship between inputs and costs
D) the relationship between costs and outputs

Question

Quizplus · Accepted Answer

A production function is a mathematical equation that shows the relationship between inputs (such as labor and capital) and outputs (such as goods and services). Therefore, choice A accurately reflects the relationship that a production function exhibits. Choice B is incorrect because a production function only considers the relationship between variable inputs and outputs, not fixed inputs. Choice C is incorrect because while inputs may impact costs, a production function is focused on outputs rather than costs. Choice D is incorrect because while outputs may impact costs, a production function specifies the relationship between inputs and outputs.

What Relationship Does a Production Function Show