The production function
A) shows the maximum level of output for a given set of inputs.
B) is an economic relationship between revenue and cost.
C) shows the relationship between input prices and amount of input used.
D) always shows increasing marginal product of labor.

Question

Quizplus · Accepted Answer

The production function shows the maximum level of output that can be produced using a given set of inputs, taking into account fixed and variable inputs. It depicts the relationship between inputs and outputs, and can be used to determine the optimal combination of inputs to achieve the desired level of output. It does not necessarily imply anything about revenue or cost, nor does it always exhibit increasing marginal product of labor.

The Production Function