D) water. A. ten lawnmowers B. gas for the lawnmowers C. employees to mow lawns D. wheels to fix broken wheels on the lawnmowers Fixed Factors Fixed factors are those which remain unchanged as out output of the firm changes in the shout-run. C) there is at least one fixed factor of production. [CBSE 2004C, 07, 09C; AI 05, 08, 11] [1 Mark] Answer: The relationship between physical input and physical output of a firm is generally referred to as production function. Perceived as a gift of nature to man. This implies that the change in price of land does not affect its supply. A cost that remains unchanged even with variations in output. In the short run, because at least one factor of production is fixed, output can be increased by adding more variable factors. A production function that describes a process which requires inputs to be combined in fixed proportions. 9. They are independent of output in the short-run. ; We use three measures of production and productivity: Total product (total output). Join now. Fixed costs are not permanently fixed; they will change over time, but are fixed, by contractual obligation, in relation to the quantity of production for the relevant period. hayharbr. A) there is increasing scarcity of factors of production. Get … 0 0. The classical economists also employed the word "capital" in reference to money. Factors of production are the inputs needed for the creation of a good or service. A) labor B) capital C) land D) business acumen E) communications. Our analysis of production and cost begins with a period economists call the short run. B. leaves marginal cost… Favorite Answer. Machines, factory buildings, plants, permanent employees etc. ... As fixed factor inputs in the short run become variable in the long run, a firm can choose the quantity of fixed factor inputs that achieves the lowest average cost of producing any output level. As the farmer adds water to the land, output increases. For example, a company may have unexpected and unpredictable expenses unrelated to production, such as warehouse costs and the like that are fixed only over the time period of the lease. answered Sep 14, 2016 by NewYorker . B. Lv 7. Which of the following is an example of a fixed factor of production? 10 years ago. B) all firms must bear some costs regardless of their output. We assume capital is a fixed factor of production in the short run, so its cost is a fixed cost. What’s your opinion at what… iii. Suppose that Acme pays a wage of $100 per worker per day. For example, to grow wheat a farmer requires inputs such as seed, farm machinery, land, and labor. Machines, factory buildings, plants, permanent employees etc. Solution for 32. This describes A) increasing marginal returns. Multiple Choice The number of workers hired to harvest the crops The amount of water used each day The land on which the farm is located The amount of fertilizer used each week They are independent of output in the short-run. 18. Which of the following is a factor of production that generally is fixed in the short run? Answer: B Diff ñ 1 Topic: Costs in the Short Run Skill: Fact 2) Fixed costs A) do NOT exist in the long run. A fixed factor of production A) is fixed in the long run but variable in the short run. All fixed proportions production functions are characterized by a constant factor proportion (or K/L ratio) at every output level. Quasi-Fixed Factor of Production Quasi-fixed factors are inputs that must be used in a fixed amount, independent of the output of the firm, but only if the firm’s output is … The production function relates the quantity of factor inputs used by a business to the amount of output that result. An airline with 20 airplanes has the fixed costs of depreciation and interest (if the planes are partially financed with debt), regardless of the number of times the planes fly or the number of seats filled on each flight. If labor is the only variable factor, Acme’s total variable costs per day amount to $100 times the number of workers it employs. Log in. However, adding increasingly more water brings smaller increases in output, until at some point the … In manufacturing industries such as motor vehicles, it is straightforward to measure how much output is being produced. In stage III, variable factor is to much compared to fixed factor, and hence MP of variable factor is negative. 0 votes. Relevance. Considered to be available in fixed quantity; therefore, does not have a supply price. 1. Ask your question. The efficiency of variable factor may also be a reason for negative returns. Money, however, was not considered to be a factor of production in the sense of capital stock since it is not used to directly produce any good. NCERT Solutions for Class 12 Micro Economics Chapter-5 Production NCERT TEXTBOOK QUESTIONS SOLVED Question 1. There isn’t one. The plot of land is the fixed factor of production, while the water that the farmer can add to the land is the key variable cost. A decrease in the price of a fixed factor of production decreases total cost and A. decreases marginal cost. In other words as a firm increases or decreases its output in the short-run, fixed factors remain constant. This is why MP becomes negative. Short Run vs. Long Run Costs. It is a useful factor of production, but is available in limited quantity. Fixed fact; fixed factor input; Fixed factors of production; Fixed Federal Monitoring Network; Fixed Fee Procurement; Fixed field; Fixed field; Fixed File System; Fixed Filter;