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This a MCQ (Multiple Choice Question) based practice test of Chapter 3 - Production and Costs of Economics of Class XII (12) for the quick revision/preparation of School Board examinations
Q  Production function shows
  • a)
    Technological relationship between inputs and output
  • b)
    Economic relationship between inputs and output
  • c)
    Technological relationship between inputs and cost
  • d)
    Technological relationship between inputs and price
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
This a MCQ (Multiple Choice Question) based practice test of Chapter 3...
Production function is an expression of the technological relation between physical inputs and output of a good.

Symbolically: Ox = f i1, i2, i3…. in)

{Where: Ox = Output of commodity x; f = Functional relationship; i1, i2, …. in = Inputs needed for Ox}

Example of Production function:
Suppose a firm is manufacturing chairs with the help of two inputs, say labour (L) and capital (K). Then, production function can be written as: OChairs = f (L, K)

Production function defines the maximum chairs (OChairs ), which can be produced with the given capital and labour inputs. If production functions is expressed as: 250 = (7L, 2K). It means, 7 units of labour and 2 units of capital can produce maximum of 250 chairs.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 3...
For example if u wanna manufacture shoes(output) u need various inputs like leather,nails etc... i hope u understand.....
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This a MCQ (Multiple Choice Question) based practice test of Chapter 3...
Explanation:

The production function is a concept used in economics to describe the relationship between inputs (factors of production) and output. It shows how much output can be produced with a given set of inputs.

1. Technological relationship between inputs and output:
The production function primarily shows the technological relationship between inputs and output. It describes how different combinations of inputs, such as labor and capital, can be used to produce a certain amount of output. It demonstrates the technical efficiency of the production process.

2. Economic relationship between inputs and output:
While the production function focuses on the technological relationship between inputs and output, it also indirectly represents the economic relationship between them. The output produced using different combinations of inputs will have different costs associated with it, which can impact the economic aspect of production.

3. Technological relationship between inputs and cost:
Although the production function does not directly show the relationship between inputs and cost, it indirectly influences the cost of production. The choice of inputs and their efficiency in the production process can affect the overall cost of production. For example, using more labor-intensive methods may increase the cost of production.

4. Technological relationship between inputs and price:
The production function does not explicitly depict the relationship between inputs and price. However, it indirectly affects the price of the final output. The cost of production, influenced by the production function, can impact the pricing decisions of the firm. Higher production costs may lead to higher prices for the final product.

In summary, the production function primarily shows the technological relationship between inputs and output. While it indirectly influences the economic aspects such as cost and price, its main focus is on the technical efficiency of the production process.
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Direction: Read the following passage and answer the question that follows:The production function exhibits technological relationships between physical inputs and outputs and is thus said to belong to the domain of engineering. Prof. Stigler does not agree with this commonly held view. The function of management is to sort out the right type of combination of inputs for the quantity of output he desires.For this, he has to know the prices of his inputs and the technique to be used for producing a specified output within a specified period of time. All these technical possibilities are derived from applied sciences but cannot be worked out by technologists or engineers alone. ‘The entrepreneurs also provide productive services, and they are far from standardized.Some men can get gang of workers to do their best, others are better at luring customers, still others at borrowing money, and each will have a different production function. If we take account of activities such as selling, settling strikes and anticipating future styles of product, it is clear that large segments of what we mean by technique are matters of business knowledge and talents, not to be acquired in the best engineering schools.” The production function is, in fact, “the economist’s summary of technological knowledge,” as pointed out by Prof. Stigler.Q. Who all have a productions function?

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This a MCQ (Multiple Choice Question) based practice test of Chapter 3- Production and Costs of Economics of Class XII (12) for the quick revision/preparation of School Board examinationsQ Production function showsa)Technological relationship between inputs and outputb)Economic relationship between inputs and outputc)Technological relationship between inputs and costd)Technological relationship between inputs and priceCorrect answer is option 'A'. Can you explain this answer?
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