Question

Which of the following statements is true about production? Select all that apply

a.) the main goal of production is to maximize output

b.) In a successful production activity, the outputs are more valuable than the inputs

c.) labor is always the most important production factor

d.) The production activity includes the manufacturing of things but not services

Answer 1

Answer: b, c

Option a) This is not true, since the objective is to maximize profit but not output.

Option b) This is true, since the purpose of production is to making output by applying necessary inputs.

Option c) This is true, since labor is the only living factor of production but all the others are non-alive. Therefore, decisions of labor influence the production.

Option d) This is not true, since know-how of a person could be produced for technical consultancy service.