Question : The production function shows the relationship between:
Option 1: Price and quantity demanded
Option 2: Price and quantity supplied
Option 3: Input and output
Option 4: Expenditure and income
Correct Answer: Input and output
Solution : The correct answer is (c) input and output.
The production function is an economic concept that depicts the relationship between the inputs (factors of production) used in the production process and the resulting output or quantity of goods and services produced. It demonstrates how different combinations of inputs lead to different levels of output.
Inputs in the production function can include physical inputs such as labor, capital (machinery, equipment), raw materials, and technology. The production function illustrates how these inputs are combined and transformed into output.
