Production Function

A period in which output can be changed by changing only variable factors

• (a) Long run

• (b) Short-run

• (c) Fixed run

• (d) Factor run

______ refers to a period in which output can be changed by changing all factors of production.

• (a) Long run

• (b) Short-run

• (c) Fixed run

• (d) Factor run

Read the following statement given below and choose the correct alternative

Statement 1- Input refers to the volume of goods produced by a firm or an industry During a specific period.

Statement 2- Total product is the total quantity of goods produced by a firm in a given period with given inputs

• (a) Both are correct

• (b) Both are incorrect

• (c) Statement 1 is correct and statement 2 is incorrect

• (d) Statement 1 is incorrect and statement 2 is correct

Read the following statement given below and choose the correct alternative.

Statement 1- Output per unit of a variable input is termed as an average product.

Statement 2- Average product is also known as an average return.

• (a) Both are correct

• (b) Both are incorrect

• (c) Statement 1 is correct and statement 2 is incorrect

• (d) Statement 1 is incorrect and statement 2 is correct

Read the following statement given below and choose the correct alternative.

Statement 1- Addition to total product when more units of the variable factor are employed is known as Average product.

Statement 2- MP= TP-TP1

• (a) Both are correct

• (b) Both are incorrect

• (c) Statement 1 is correct and statement 2 is incorrect

• (d) Statement 1 is incorrect and statement 2 is correct

______ refers to the increase in the total product when only one factor is increased.

• (a) Production factor

• (b) Returns to a factor

• (c) Returns to inputs

• (d) Law of Diminishing returns

Law of variable proportions is also known as;

• (a) Law of returns

• (b) Law of returns to factors

• (c) Returns to variable factors

• (d) All of the above

Read the following statement given below and choose the correct alternative.

Assertion- In the first phase of the law of variable proportions, TP rises at an increasing rate and MP decreases

Reason- In the third phase of the law of variable proportions, TP falls and MP becomes negative.

• (a) Both Assertion and Reason are true. The reason is the correct explanation of the assertion

• Both Assertion and Reason are true. The reason is not the correct explanation of the assertion

• (c) The assertion is true but the reason is not

• (d) The reason is true but the assertion is not

Read the following statement given below and choose the correct alternative.

Assertion- Phase one of the Law of variable proportions is known as increasing returns to a factor.

Reason- Phase two of the Law of variable proportions is known as increasing returns to a factor.

• (a) Both Assertion and Reason are true. The reason is the correct explanation of the assertion

• (b) Both Assertion and reason are not true. The reason is not the correct explanation of the assertion

• (c) The assertion is true but the reason is not

• (d) The reason is true but the assertion is not

Which of the following are reasons for the law of variable proportions?

• (a) Better utilisation of fixed factors

• (b) Indivisibility of fixed factors

• (c) Increased efficiency of variable factors.

• (d) All of the above