100 Objective Questions and Answers: Meaning of Products, Production Function, and Factors of Production

Welcome to this comprehensive Economics objective question bank on Meaning of Products, Factors Determining the Level of Production, Production Function, Isoquant Curve, and Factors of Production. This resource covers the meaning of products, the factors that determine the level of production, the production function, isoquant curves, and the rewards and characteristics of the factors of production (land, labour, capital, and entrepreneur). These 100 objective questions are designed for students preparing for SSCE, NECO, NABTEB, UTME, and university examinations. Each question is followed by the correct answer, making it ideal for revision and self-assessment.

Section A: Meaning of Products and Production (Questions 1–10)

1. Products are defined as?
A. Inputs
B. Outputs; the end result of production process
C. Factors of production
D. Raw materials

Answer: B

2. Which of the following is an example of a product?
A. Land
B. Labour
C. Bread
D. Capital

Answer: C

3. Production is complete when?
A. Goods are manufactured
B. Goods reach the wholesaler
C. Goods and services finally reach the consumer
D. Goods are stored

Answer: C

4. Production in economics occurs when?
A. A commodity is sold
B. Utility is created or added
C. A commodity is manufactured
D. Raw materials are extracted

Answer: B

5. Which of the following best defines production?
A. Creation of utility yielding goods and services for human use
B. Conversion of raw materials into finished goods
C. Creation of goods for human consumption
D. Delivery of finished goods to consumers

Answer: A

6. The act of combining factor inputs in order to obtain specific output is known as?
A. Factor procurement
B. Manufacturing
C. Investment
D. Production

Answer: D

7. Methods of production can be broadly classified as?
A. Capital and labour intensive
B. Capitalist and socialist
C. Direct and indirect
D. Industrial and agricultural

Answer: C

8. Direct production is characterized by?
A. Production for exchange
B. Production for personal and family needs
C. High standard of living
D. Use of advanced machinery

Answer: B

9. Indirect production involves?
A. Production for personal consumption only
B. Production of goods and services which are later exchanged for money
C. Barter trade only
D. Subsistence farming

Answer: B

10. The three stages of indirect production are?
A. Primary, secondary, tertiary
B. Direct, indirect, mixed
C. Agricultural, industrial, service
D. Extraction, manufacturing, distribution

Answer: A

Section B: Factors Determining the Level of Production (Questions 11–25)

11. The volume of output in any country is determined by?
A. Only the quantity of resources
B. Only the quality of resources
C. The quantity and quality of productive resources
D. The level of consumption

Answer: C

12. Which of the following is NOT a factor determining the level of production?
A. Quantity and quality of productive resources
B. Favourable working conditions
C. Level of technical knowledge
D. Amount of money in circulation

Answer: D

13. Favourable working conditions and availability of social amenities help to?
A. Reduce production
B. Improve efficiency of labour
C. Increase unemployment
D. Decrease output

Answer: B

14. The level of technical knowledge affects?
A. The level of output
B. The colour of products
C. The taste of consumers
D. The price of land

Answer: A

15. Availability of infrastructural facilities such as roads, electricity, water supply helps to?
A. Increase productivity
B. Decrease productivity
C. Hinder production
D. Reduce efficiency

Answer: A

16. Natural factors such as weather affect production especially in?
A. Industrial countries
B. Agrarian countries
C. Developed countries
D. Urban areas

Answer: B

17. The type of economic policies undertaken by the government should be geared towards?
A. Consumption practices
B. Capital accumulation and diversification
C. Increased importation
D. Reduced savings

Answer: B

18. Efficiency in the use of factors of production determines?
A. The level of output
B. The level of consumption
C. The level of taxation
D. The level of importation

Answer: A

19. Political and social stability in a country helps to?
A. Discourage investment
B. Encourage investment and increase production
C. Reduce production
D. Increase civil strife

Answer: B

20. Which of the following is an infrastructural facility?
A. Good roads
B. Raw materials
C. Labour
D. Capital

Answer: A

21. A major cause of low productivity in West Africa is?
A. High level of technology
B. Low level of technology or poorly developed manpower
C. Abundant capital
D. Favourable weather

Answer: B

22. The provision of social amenities such as canteens and recreational facilities helps to?
A. Improve efficiency of labour
B. Reduce efficiency of labour
C. Increase absenteeism
D. Decrease production

Answer: A

23. Adverse weather conditions such as drought will lead to?
A. High production
B. Low production
C. Increased export
D. Economic growth

Answer: B

24. Government economic policies and reforms should be geared towards?
A. Capital accumulation
B. Consumption
C. Importation
D. Hoarding

Answer: A

25. If productive resources are inefficiently allocated, productivity will be?
A. High
B. Low
C. Constant
D. Unchanged

Answer: B

Section C: Production Function (Questions 26–40)

26. A production function relates?
A. Cost of output
B. Wages to profit
C. Cost of input
D. Output to input

Answer: D

27. The production function expresses the relationship between?
A. The quantity of input and the quantity of output
B. The price of input and output
C. The cost of production and profit
D. The demand and supply of goods

Answer: A

28. In the production function Q = f(K,L), Q represents?
A. Quantity of capital
B. Quantity of labour
C. Quantity of output
D. Quantity of land

Answer: C

29. A characteristic of the linear production function is that?
A. The percentage change in output is less than one
B. The percentage change in inputs exceeds output
C. Output and all inputs change by the same percentage
D. The percentage change in output is greater than one

Answer: C

30. In the production function Q = K×L, K represents?
A. Quantity of labour
B. Area of land
C. Quantity of output
D. Quantity of capital

Answer: B

31. The production function Q = f(labour) indicates that?
A. Output is a function of labour
B. Output is a function of capital
C. Output is a function of land
D. Output is a function of entrepreneur

Answer: A

32. In a production function with multiple inputs, the general form is?
A. Q = f(Zj)
B. Q = f(Zj1, Zj2, …..Zjn)
C. Q = f(K,L)
D. Q = f(labour)

Answer: B

33. The table showing units of labour, capital, and units of paper demonstrates?
A. Different combinations of inputs producing the same output
B. Different outputs from the same inputs
C. The law of diminishing returns
D. The law of increasing returns

Answer: A

34. A production function shows the maximum quantity of output that can be produced with?
A. Given quantities of inputs
B. Unlimited inputs
C. A single input
D. No inputs

Answer: A

35. The input that utilizes the production procedures are called?
A. Outputs
B. Factors of production
C. Products
D. Goods

Answer: B

36. If a farmer uses 2 hours of labour and 1 hectare of land to produce 2 tonnes of rice, this relationship is called?
A. Demand function
B. Supply function
C. Production function
D. Cost function

Answer: C

37. The production function Q = f(Zj) where Zj is variable input implies?
A. Output depends on the quantity of that input
B. Output is independent of inputs
C. Output is fixed
D. Output is zero

Answer: A

38. In economics, the production function is a?
A. Technical relationship between inputs and output
B. Financial relationship
C. Marketing relationship
D. Legal relationship

Answer: A

39. The production function assumes that?
A. Technology is constant
B. Technology changes rapidly
C. Inputs are unlimited
D. Output is unlimited

Answer: A

40. Which of the following is NOT a factor of production in the production function?
A. Land
B. Labour
C. Capital
D. Money

Answer: D

Section D: Isoquant Curve (Questions 41–50)

41. An isoquant is a contour line which shows?
A. The relationship between various possible combinations of two factors of production that can produce a given quantity
B. The relationship between price and quantity demanded
C. The relationship between cost and output
D. The relationship between income and consumption

Answer: A

42. An isoquant is also the locus of all technically efficient combinations of all factors of production for?
A. A given level of output
B. All levels of output
C. A given level of input
D. A given level of cost

Answer: A

43. A series of isoquants from the same production function is known as?
A. Isoquant map
B. Indifference curve
C. Production possibility curve
D. Demand curve

Answer: A

44. Which of the following is a characteristic of an isoquant curve?
A. It slopes upward
B. It is convex to the origin
C. It is concave to the origin
D. It is a straight line

Answer: B

45. All combinations on an isoquant give?
A. Different output levels
B. The same output level
C. Different input levels
D. The same cost

Answer: B

46. Isoquant curves cannot intersect each other because?
A. It becomes difficult to explain
B. They are parallel
C. They are straight lines
D. They represent different outputs

Answer: A

47. An isoquant curve slopes?
A. Upward
B. Downward or negatively
C. Vertically
D. Horizontally

Answer: B

48. The isoquant curve is usually?
A. Convex to the origin
B. Concave to the origin
C. Straight line
D. L-shaped

Answer: A

49. A collection of different isoquants representing different output levels is called?
A. Isoquant map
B. Indifference map
C. Production possibility map
D. Cost map

Answer: A

50. The isoquant curve shows combinations of inputs that produce?
A. A given quantity of a commodity
B. Different quantities of a commodity
C. Zero output
D. Maximum profit

Answer: A

Section E: Factors of Production and Their Rewards (Questions 51–75)

51. Productive resources can also be called?
A. Primary productive
B. Factors of production
C. Items of production
D. Labour and material resources

Answer: B

52. The reward for land as a factor of production is?
A. Profit
B. Rent
C. Interest
D. Wage

Answer: B

53. The reward of labour is?
A. Wages
B. Profit
C. Rent
D. Dividends

Answer: A

54. Profit is the reward for?
A. Capital
B. Entrepreneur
C. Land
D. Labour

Answer: B

55. Interest is the payment made for the use of?
A. Labour
B. Land
C. Capital
D. Enterprise

Answer: C

56. Which of the following is NOT a reward of any factor of production?
A. Interest
B. Wage
C. Rent
D. Subsidy

Answer: D

57. The factor of production that coordinates other factors of production is?
A. Wealth
B. Land
C. Labour
D. Entrepreneur

Answer: D

58. Land is different from other factors of production because it is?
A. Owned by landlords
B. Owned by government
C. Owned by individuals
D. A free gift of nature

Answer: D

59. Which of the following is a feature of labour?
A. Fixed in supply
B. Indestructible
C. Its reward is interest
D. Mobile

Answer: D

60. The reward for an entrepreneur in production is?
A. Commission
B. Interest
C. Profit
D. Salary

Answer: C

61. The distinguishing function of an entrepreneur is?
A. Planning
B. Control
C. Risk-bearing
D. Management

Answer: C

62. Land aids production through the following except?
A. Provision of natural resources
B. The reward is rent
C. Facilitates the construction of buildings
D. Risk bearing

Answer: D

63. Land refers to all forms of natural resources that can attract the payment of?
A. Wages
B. Royalties
C. Interest
D. Profit

Answer: B

64. Which of the following factors of production consists of man-made goods?
A. Land
B. Labour
C. Capital
D. Entrepreneur

Answer: C

65. One major function of the entrepreneur is?
A. Bearing of risks
B. Maximizing profits
C. Taking charge of day to day management
D. Determining selling price

Answer: A

66. Which of the following is not regarded as labour?
A. Immobility of labour
B. Mental effort
C. Skillful effort
D. Physical effort

Answer: A

67. The most mobile factor of production is?
A. Land
B. Capital
C. Entrepreneur
D. Labour

Answer: D

68. The factor which embraces all natural resources is?
A. Land
B. Rocks
C. Mineral deposits
D. Petroleum

Answer: A

69. Social capital belongs to?
A. Firms
B. Corporations
C. Communities
D. Governments

Answer: D

70. The entrepreneur in any business venture is the?
A. Main risk bearer
B. Source of all decisions
C. Efficient manager
D. Pivot of production

Answer: A

71. If a person receives a higher wage than would be necessary to induce him to work, he is said to be receiving?
A. Rent
B. Profit
C. Interest
D. Surtax

Answer: A

72. The more durable part of the capital that should require renewal only at fairly long intervals is known as?
A. Circulating capital
B. Liquid capital
C. Solid capital
D. Fixed capital

Answer: D

73. Which of the following is not included in capital as a factor of production?
A. Machinery and tools
B. Offices and factories
C. Physical effort by workers
D. Roads

Answer: C

74. Under which of the factors of production would lakes, rivers and minerals be classified?
A. Labour
B. Capital
C. Land
D. Entrepreneur

Answer: C

75. A major function of the entrepreneur is to?
A. Finance public projects
B. Donate to the needy
C. Bear risks
D. Discourage investors

Answer: C

Section F: Capital and Its Types (Questions 76–90)

76. Capital as a factor of production is defined as?
A. Man-made resources produced to aid production
B. Natural resources
C. Human effort
D. Free gift of nature

Answer: A

77. Which of the following items is not classified as working capital?
A. Equipment
B. Fuel
C. Money to pay wages
D. Semi-finished goods

Answer: A

78. An example of circulating capital used by an entrepreneur is?
A. Factory building
B. Raw materials
C. Pipe-borne water
D. Electric power

Answer: B

79. A form of capital which is used up in the production process is called?
A. Circulating capital
B. Fixed capital
C. Issued capital
D. Liquid capital

Answer: A

80. The form of capital which is usually consumed or transformed into finished goods and services in the production process is called?
A. Industrial capital
B. Social capital
C. Fixed capital
D. Circulating capital

Answer: D

81. The form of capital provided by the government in order to aid the production of other goods and services is referred to as?
A. Circulatory capital
B. Current capital
C. Fixed capital
D. Social capital

Answer: D

82. Fixed capital refers to capital that?
A. Is used up in the production process
B. Has a relatively long life-span
C. Is in monetary terms
D. Is owned by individuals

Answer: B

83. Circulating capital refers to capital that?
A. Has a relatively long life-span
B. Is used up in the process of production
C. Is owned by government
D. Is fixed in supply

Answer: B

84. Which of the following is an example of fixed capital?
A. Raw materials
B. Cash
C. Machinery
D. Fuel

Answer: C

85. Which of the following is an example of circulating capital?
A. Buildings
B. Machinery
C. Raw materials
D. Vehicles

Answer: C

86. Social capital includes?
A. Roads and electricity
B. Machinery and tools
C. Raw materials
D. Cash

Answer: A

87. Capital that is not used up or does not change form in the course of production is called?
A. Circulating capital
B. Working capital
C. Fixed capital
D. Social capital

Answer: C

88. The reward for capital is?
A. Rent
B. Wage
C. Interest
D. Profit

Answer: C

89. Which of the following is NOT a characteristic of capital?
A. It is man-made
B. It takes different forms
C. It is a free gift of nature
D. It can be stored for future use

Answer: C

90. Capital formation means?
A. Increasing the stock of real capital in a country
B. Decreasing the stock of capital
C. Consuming all capital goods
D. Exporting capital goods

Answer: A

Section G: Entrepreneur and Risk (Questions 91–100)

91. An entrepreneur organizes?
A. Human and material resources for production
B. Only human resources
C. Only material resources
D. Only financial resources

Answer: A

92. Entrepreneurship is a special sort of human effort that takes on the risk of bringing together?
A. Labour, capital and land
B. Labour, capital and money
C. Land, money and machinery
D. Capital, money and equipment

Answer: A

93. The reward for the entrepreneur is?
A. Profit or loss
B. Rent
C. Wage
D. Interest

Answer: A

94. The entrepreneur is the?
A. Risk bearer
B. Wage earner
C. Rent collector
D. Interest receiver

Answer: A

95. Which of the following is a function of the entrepreneur?
A. Organizing other factors of production
B. Providing land
C. Providing labour
D. Providing capital only

Answer: A

96. The risk borne by the entrepreneur is?
A. Transferable
B. Not transferable
C. Insurable
D. Shared

Answer: B

97. The entrepreneur is very?
A. Immobile
B. Mobile
C. Fixed
D. Static

Answer: B

98. The entrepreneur’s functions regarding what and how to produce are?
A. Unique
B. Common
C. Irrelevant
D. Simple

Answer: A

99. The entrepreneur is subject to?
A. Diminishing returns
B. Increasing returns
C. Constant returns
D. Zero returns

Answer: A

100. Who bears the risk of production?
A. Production managers
B. Factory workers
C. Entrepreneurs
D. Retailers

Answer: C

Answer Key Summary

Conclusion

This comprehensive objective question bank on Meaning of Products, Factors Determining the Level of Production, Production Function, Isoquant Curve, and Factors of Production covers the essential concepts of production, productivity, production function, isoquant analysis, and the rewards and characteristics of land, labour, capital, and entrepreneur. Students preparing for SSCE, NECO, NABTEB, UTME, and university examinations will find these 100 questions invaluable for revision and self-assessment. Master these questions to build a strong foundation in production economics and excel in your examinations.