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AGEC 105 Questions with Answers (100% Correct
Answers)
Total Physical Product Answer: The total output of goods or services
produced by the firm during the current period. The total product of a
wheat farmer is the yield per acre multiplied by the number of acres
harvested. Examples include total wheat produced by a wheat
producer, total pounds of milk produced by a dairy farmer.
Average and Marginal Physical Product Answer: The level of output
or total product produced by a business per unit of input used
Stage II of production Answer: represents the range of interest to
economists. why stop in stage I and why produce in stage II?
Law of diminishing marginal returns Answer: as successive units of a
variable input are added to a production process with the other inputs
held constant, the marginal physical product eventually decreases
Average Total Costs Answer: The total costs incurred by the business
in the current period per unit of output.
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Marginal Input costs Answer: The change in the cost of a resource
used in production as more of this resource is employed.
Marginal value product Answer: the change in the revenue earned by
the business as it employs an additional unit of a resource, holding
other resource use constant
Iso-cost line Answer: much like the budget line for consumers, this line
reflects the particular level of expenditure for two inputs. the slope of
the iso-cost line is the ratio of the prices of the two inputs
Isoquant Answer: a curve that reflects the combinations of two inputs
that will produce a specific level of output.
Marginal rate of technical substitution Answer: the rate of substitution
or trade-off between two inputs in the production of a specific product,
also represents the slope of an isoquant curve
rental rate of capital Answer: the cost of capital broadly defined; the
price you would have to pya to rent all the inputs used to produce the
business's product
© 2025 All rights reserved
AGEC 105 Questions with Answers (100% Correct
Answers)
Total Physical Product Answer: The total output of goods or services
produced by the firm during the current period. The total product of a
wheat farmer is the yield per acre multiplied by the number of acres
harvested. Examples include total wheat produced by a wheat
producer, total pounds of milk produced by a dairy farmer.
Average and Marginal Physical Product Answer: The level of output
or total product produced by a business per unit of input used
Stage II of production Answer: represents the range of interest to
economists. why stop in stage I and why produce in stage II?
Law of diminishing marginal returns Answer: as successive units of a
variable input are added to a production process with the other inputs
held constant, the marginal physical product eventually decreases
Average Total Costs Answer: The total costs incurred by the business
in the current period per unit of output.
© 2025 All rights reserved
, 2
Marginal Input costs Answer: The change in the cost of a resource
used in production as more of this resource is employed.
Marginal value product Answer: the change in the revenue earned by
the business as it employs an additional unit of a resource, holding
other resource use constant
Iso-cost line Answer: much like the budget line for consumers, this line
reflects the particular level of expenditure for two inputs. the slope of
the iso-cost line is the ratio of the prices of the two inputs
Isoquant Answer: a curve that reflects the combinations of two inputs
that will produce a specific level of output.
Marginal rate of technical substitution Answer: the rate of substitution
or trade-off between two inputs in the production of a specific product,
also represents the slope of an isoquant curve
rental rate of capital Answer: the cost of capital broadly defined; the
price you would have to pya to rent all the inputs used to produce the
business's product
© 2025 All rights reserved
