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CUET Economics 2025 PYQs28 May Shift 1. Free, no login required.

Micro

past year questions, CUET Economics 2025 28 May Shift 1

Production & Costs

past year questions, Micro, CUET Economics 2025 28 May Shift 1

Easy

Comprehension:

Read the given paragraph carefully and answer the following questions.

Total Product, Average Product and Marginal Product

The relationship between the variable input and output, keeping all other inputs constant, is often referred to as total product (TP) of the variable input. Average product (AP) is defined as the output per unit of variable input. Marginal product (MP) of an input is defined as the change in output per unit of change in the input when all other inputs are held constant. According to the law of variable proportions, the marginal product of an input initially rises and then, after a certain level of employment, it starts falling. As long as AP increases, it must be the case that MP is greater than AP. Otherwise, AP cannot rise. Similarly, when AP falls, MP has to be less than AP. It follows that MP curve cuts AP curve from above at its maximum.

The shape of the average product and marginal product curves are...................

  1. Both Inverse 'U' Shaped
  2. Both 'U' Shaped
  3. AP 'U' Shaped and MP Inverse 'U' Shaped
  4. MP 'U' Shaped and AP Inverse 'U' shaped

Solution

✅ Correct Option: 1

Option 1 -> Both curves initially rise, reach a maximum, then decline due to the law of diminishing returns, creating an inverted U-shape.

Option 2 -> Incorrect, U-shaped curves decline first then rise, which contradicts production theory.

Option 3 -> Incorrect combination, both curves follow the same inverted U pattern.

Option 4 -> Incorrect combination, both curves follow the same inverted U pattern.

Hence, Both Inverse 'U' Shaped -> In production theory, both Average Product (AP) and Marginal Product (MP) curves exhibit an inverted U-shape (∩). Initially, as variable input increases, both AP and MP rise due to increasing returns. They reach their respective maximum points, with MP peaking before AP. Subsequently, both curves decline due to the Law of Diminishing Returns. The MP curve intersects the AP curve at AP's maximum point. This inverted U-shape reflects the three stages of production: increasing returns, diminishing returns, and negative returns. -> correct

More from this set:

Question 47

The case where a marginal product is greater than the average product, where?

  1. MP cut AP at Minimum
  2. AP remains Constant
  3. AP Decreases
  4. AP Increases

Question 48

Keeping the capital as a fixed input, as 3, when the quantity of labor changes from 3 to 4, the total product with labor also rises from 40 to 50 units. What is the average product after the change?

  1. 50
  2. 13.33
  3. 12.5
  4. 40

Question 49

A firm increased the capital by a unit, which led to a rise in total product from 10 units to 24 units. Further increase in capital in the same quantity leads to an increase in total product to 40 units. What is the difference in change in marginal product?

  1. 14
  2. 2
  3. 30
  4. 16

Question 50

In the production of clothes, cotton is defined as................

  1. capital
  2. Input.
  3. Final Output.
  4. Intermediate output

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