#1
Which of the following is considered a primary factor of production?
Land
ExplanationLand encompasses natural resources used in production.
#2
Which factor of production involves the physical and natural resources used in the production process?
Land
ExplanationLand encompasses natural resources like water, minerals, etc.
#3
What is the distinguishing characteristic of human capital as a factor of production?
It includes the skills and knowledge of individuals
ExplanationHuman capital represents the skills and knowledge of individuals.
#4
What is the difference between explicit and implicit costs in the context of production?
Explicit costs involve tangible expenses, while implicit costs represent opportunity costs
ExplanationExplicit costs are direct expenses, while implicit costs are the opportunity costs.
#5
Which factor of production is associated with the physical tools and equipment used in the production process?
Capital
ExplanationCapital refers to physical assets like machinery and equipment.
#6
What is the role of labor as a factor of production?
To provide human effort and skill
ExplanationLabor contributes human effort and skill to the production process.
#7
Which factor of production is related to the creativity and innovation of individuals?
Entrepreneurship
ExplanationEntrepreneurship involves organizing resources and innovating.
#8
What is the primary function of capital as a factor of production?
To produce goods and services
ExplanationCapital is used to produce goods and services.
#9
How does technology impact the factor of production known as labor?
Reduces the need for labor
ExplanationTechnology automates tasks, reducing the requirement for human labor.
#10
How does specialization impact the efficiency of factors of production?
It increases efficiency
ExplanationSpecialization leads to efficiency gains in production.
#11
What is the function of financial capital in the production process?
To provide monetary resources for production
ExplanationFinancial capital supplies funds for production.
#12
What is the difference between fixed and variable capital?
Fixed capital remains constant, while variable capital can be easily changed
ExplanationFixed capital doesn't change in the short term, while variable capital can be adjusted.
#13
In the context of factors of production, what does the term 'opportunity cost' refer to?
The cost of using resources that have alternative uses
ExplanationOpportunity cost is the value of the next best alternative.
#14
What is the significance of entrepreneurship in the production process?
It organizes and manages other factors of production
ExplanationEntrepreneurship coordinates other factors of production and takes risks.
#15
In economic terms, what does the term 'rent' specifically refer to?
The earnings of land
ExplanationRent is the payment for the use of land.
#16
What is the concept of diminishing returns in the context of factors of production?
As one factor increases, production increases at a decreasing rate
ExplanationAdding more of a variable input beyond a certain point yields diminishing returns.
#17
How does the factor of production, entrepreneurship, contribute to economic growth?
By promoting innovation and risk-taking
ExplanationEntrepreneurship fosters innovation and takes risks, driving economic growth.