Which of the following states that "The marginal product of a factor input initially rises with its employment level, but after reaching a certain level of employment, it starts falling"? Option 1: Diminishing Returns to Scale. Option 2: Law of Variable Proportions. Option 3: Law of Diminishing Marginal Rate of Substitution. Option 4: Increasing Returns to Scale.

The answer is 'Law of Variable Proportions.'. View full solution:

CUET Economics - Which of the following states that "The marginal product of a factor input initially rises with its employment level, but after reaching a certain level of employment, it starts falling"? | PYQs + Solutions

CUET Economics 2025 28 May Shift 2

Micro

Easy

Diminishing Returns to Scale.

Law of Variable Proportions.

Law of Diminishing Marginal Rate of Substitution.

Increasing Returns to Scale.

✅ Correct Option: 2