14. Which of the following is true of a production function? A. It shows the relationship between the cou of production and total output. produced B. It show's the relationship between total output produced and total revenue, C In describes how inputs like capital and labour are transformed into output. D. It describes how outped in maximized when the supply of labour and capital are 15. The law of diminishing returns to an inpul states that if other inputs and fixed. A. average product will eventually decrease with increases in the variable input I marginal product will eventually decrease with increases in the variable input C. revenue will evemaally decrease with increases in the variable input D. the proportion of the variable input used will eventually decrease as more output is pinduced 16. A firm that is trying to produce a given level of ouiput. QO, at the lowest possible col will A select the input combination of which an teooral line is tangers to the Q0 exguam, B. select the input combination at which an incost line is above the Q0 isoquam C. solved the input combination at which an locost ling is below the QU inoquant. D. choose to produce at a level where variable costs are less than or equal to fixed 17. Gravel is made by hand in Nepal bait by machines in the European Union because. A the marginal product of labour is higher in Nepal than in Europe. B. capital is much cheaper in Nepal than in Europe C. of differences in convunct pocferences D. the relative prices of labour and capital differ in the two countries. 15. When diminnhing retums wet in A. variable cost increases al a docreating rate B. variable cost increases at an increasing tate C. variable cait decreases at a decreasing rate D. variable cost decreases at on increasing rite 19. What do we mean when we say that a Erm is a price taker? A. The government sets the price B. Customers alone decide the price to be charged by the firm C. The firm has market power D. The firm has an market power. 16, In a perfectly competitive industry, which of the following is not necessarily true In the long ran! A. All Emm charge the same price. B. All firmin cam zero copnomic profit C. All firma operate at minimum long run average oml. D. All firms produce the same quantity