Which of the Following Changes a Firm's Production Function

question 290

Multiple Choice

Which of the following changes a firm's production function?

• A) hiring additional workers
• B) acquiring additional physical capital
• C) adding a second production facility exactly like its first production site
• D) adopting new technology

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Definitions:

Variable Costs

Variable costs that change in direct correlation with production output or sales figures, like labor costs and materials expenses.

Fixed Costs

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, often used to provide more realistic performance comparisons.

Variable Costs

Variable Costs are expenses that vary in direct proportion to changes in the levels of an activity or production volume, such as materials and labor costs.