Assignment Overview
Key Concepts
Marginal Product
- Definition: The additional revenue obtained by using one more unit of a factor.
- Options Related to Marginal Product:
- A. Marginal product
- B. Additions product
- C. Marginal revenue
- D. Average product
Production Function
- Purpose of the Production Function:
- A. Indicates the best output to produce.
- B. Relates naira input to naira output.
- C. Relates physical output to physical input.
- D. Indicates the best way to combine factors to produce any given output.
Law of Diminishing Returns
- Statement: The law of diminishing returns begins to operate when:
- A. Total product begins to rise.
- B. Total product begins to fall.
- C. Marginal product begins to fall.
- D. Marginal product begins to rise.
Efficient Allocation of Resources
- Condition for Resource Allocation Efficiency:
- Resources are efficiently allocated when production takes place at that output level where price equals:
- A. Marginal revenue.
- B. Marginal cost.
- C. Average variable cost.
- D. Total cost.