Question

1. Derived demand refers to a demand connected to the final product’s

______________.

A. production cost

B. demand

C. production

D. design

2. The increase in output stemming from a one-unit increase in an input is referred to as marginal _________.

A. cost

B. revenue

C. physical product

D. physical input

3. Total output will increase until which of the following occurs?

A. Marginal cost is equal to marginal revenue.

B. Marginal cost is minimized.

C. Marginal physical product is equal to zero.

D. Marginal physical product is less than zero

4. As more inputs are added to fixed inputs, the result is described by the law of diminishing ______________.

A. returns

B. marginal costs

C. marginal inputs

D. marginal revenues

Answer 1

Question 1. Option b

derived demand for an input depends on the demand of the final product

question 2 . Option c

marginal physical product is the additional output obtained by hiring one more unit of input

question 3. Option c

as long as the marginal physical product is more than 0 , total output will increase .This means each unit of input is adding to the output .

Question 4 . Option a

law of diminishing returns describes how output changes when we vary the quantity of variable input given the fixed factor