The Production Function

question 48

Multiple Choice

The production function
Describes:

• A)how any amount of labor and a particular amount of capital can be combined to generate output.
• B)how particular amounts of capital and labor can be combined to generate output.
• C)how any amount of capital and labor can be combined to generate output.
• D)how any amount of capital and a particular amount of labor can be combined to generate output.
• E)none of the above

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Definitions:

Physical Units

A measure of quantity, such as items or pieces, used to quantify the inventory, output, or production level of a business.

FIFO Method

An inventory valuation method where the first items acquired are the first ones sold or used, standing for First In, First Out.

Average Cost Method

An inventory costing method where the cost of goods sold and ending inventory values are determined by averaging the costs of all items available for sale during the period.

Average Costing

An inventory costing method where all units are valued at the average cost of all similar items in the inventory.