Micro

Production & Costs

Medium

Match List-I with List-II

List-I List-II
(A) Production function (I) $f(tx_1, tx_2) > t f(x_1, x_2)$
(B) Constant returns to scale (II) $f(tx_1, tx_2) < t f(x_1, x_2)$
(C) Increasing returns to scale (III) $f(x_1, x_2)$
(D) Decreasing returns to scale (IV) $f(tx_1, tx_2) = t f(x_1, x_2)$

Choose the correct answer from the options given below:

List-I	List-II
(A) Production function	(I) $f(tx_1, tx_2) > t f(x_1, x_2)$
(B) Constant returns to scale	(II) $f(tx_1, tx_2) < t f(x_1, x_2)$
(C) Increasing returns to scale	(III) $f(x_1, x_2)$
(D) Decreasing returns to scale	(IV) $f(tx_1, tx_2) = t f(x_1, x_2)$

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 4

Option 4: (A) - (III), (B) - (IV), (C) - (I), (D) - (II) -> Let's match each concept correctly:

(A) Production function: This is the general functional form representing the relationship between inputs and output, denoted as f(x₁, x₂). So (A) matches with (III).

(B) Constant returns to scale: When all inputs are scaled by factor t, output scales by exactly the same factor t. Mathematically: f(tx₁, tx₂) = t·f(x₁, x₂). So (B) matches with (IV).

(C) Increasing returns to scale: When all inputs are scaled by factor t, output increases by MORE than factor t. This means: f(tx₁, tx₂) > t·f(x₁, x₂). So (C) matches with (I).

(D) Decreasing returns to scale: When all inputs are scaled by factor t, output increases by LESS than factor t. This means: f(tx₁, tx₂) < t·f(x₁, x₂). So (D) matches with (II).

Returns to scale measure how output responds when all inputs are proportionally increased. The inequalities with 't' precisely capture whether output grows proportionally (=), more than proportionally (>), or less than proportionally (<) relative to input changes. -> correct

2025: 13 May Shift 2

In which condition, the average cost of a firm declines when output increases?

2025: 30 May Shift 1

When Marginal productivity starts decreasing but remains positive , Total Productivity is ______.

2026: 23 May Shift 1

Keeping other factor constant, A change in the price of input brings about a change in the supply of a commodity.

Arrange the process of this change in the correct sequence:

A. The average cost of production of the commodity reduces.

B. The supply of a commodity increases.

C. The profit per unit of the producer rises.

D. If the price of input falls.

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Choose the correct options with reference to short-run average costs.

(A) Average total cost = total cost / quantity of output

(B) Average total cost = average variable cost + average fixed cost

(D) Average fixed cost = average variable cost - average cost

Choose the correct answer from the options given below:

2025: 26 May Shift 2

According to the law of variable proportions. Which among the the following option is correct?

2025: 3 June Shift 2

The cost of a firm has increased from Rs. $67$ to Rs. $80$ when the units of cotton production rose from $8$ to $9$ . Calculate the marginal cost of a firm?

Solution

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