Question
3) Complete the blank spaces with appropriate words. a) The process of changing raw-materials into intermediate or final goods as desired by the consumer to satisfy his/her needs is known as (1 mark) b) According to Adam Smith, the main purpose of production is while according to Keynes, the main purpose of production is (2 marks) c) is the production of goods and services for one's own consumption while is the production of goods and services mainly for sale in the market. (2 marks) 2022-NESA (National Examination and School Inspection Authority) 017-Page 20 4) Use the information in the table below to answer the questions that follow. Out put & TC & TFC & TVC 0 & 50 & & 1 & 80 & & 2 & 90 & & 3 & 95 & & 4 & 105 & & 5 & 125 & & 6 & 170 & & Calculate TVC and TFC and fill the table. (7 marks)
Answer
4.7
(255 Votes)
Xavier
Veteran · Tutor for 11 years
Answer
3a) Production3b) Consumption, Employment3c) Subsistence production, Commercial production4) The completed table is as follows:\begin{array}{|c|c|c|c|}\hline\ Out\ put\ &\ TC\ &\ TFC\ &\ TVC\ \\\hline\ 0\ &\ 50\ &\ 50\ &\ 0\ \\\hline\ 1\ &\ 80\ &\ 50\ &\ 30\ \\\hline\ 2\ &\ 90\ &\ 50\ &\ 40\ \\\hline\ 3\ &\ 95\ &\ 50\ &\ 45\ \\\hline\ 4\ &\ 105\ &\ 50\ &\ 55\ \\\hline\ 5\ &\ 125\ &\ 50\ &\ 75\ \\\hline\ 6\ &\ 170\ &\ 50\ &\ 120\ \\\hline\end{array}
Explanation
3a) The process of changing raw materials into intermediate or final goods as desired by the consumer to satisfy his/her needs is known as production. 3b) According to Adam Smith, the main purpose of production is consumption, while according to Keynes, the main purpose of production is employment.3c) Subsistence production is the production of goods and services for one's own consumption while commercial production is the production of goods and services mainly for sale in the market.4) The Total Cost (TC) of production is the sum of the Total Fixed Cost (TFC) and the Total Variable Cost (TVC). The TFC is the cost that does not change with the level of output, while the TVC changes with the level of output. Given that the TC at 0 output is 50, we can infer that this is the TFC since there are no variable costs at 0 output. To calculate the TVC at each level of output, we subtract the TFC from the TC at each level.#