True/False

1. Study of the relationship between input and output is called theory of production.
2. Periods of production refers to the nature of economic arrangement of the input in
response to the changing economic environment.
3. Marginal product is a good indicator of productivity.
Matching
A. B
1. Accounting cost. A. Implicit cost + Explicit
2. Explicit costs. B. Cost of purchased input only
3. Variable costs. C. Out-of-pocket costs
4. Economic costs. D. Cost of raw materials

Labour TP AP MP
0 0 -- --
1 15
2 18
3 23
4 26
5 31
6 34
7 39
8 42

Computation
1. Calculate the average product for each input level
2. Calculate marginal product for each input level
3. Describe the relationship between MP and Ap

Answer
TRUE FALSE
 1. True
2. True
3. False
Matching
1. B
2. C
3. D
4. A
Computation
Labour TP AP MP
0 0 -- --
1 15 15 15
2 38 19 23
3 48 12 10
4 48 12 0
5 35 7 -13
6 30 5 -5
7 21 3 -9
8 8 1 -16