Micro

Production & Costs

Medium

Which one of the following leads to the law of variable proportions?

One factor is constant.

Some factors are more efficient than others.

Specialisation of factors.

None of the factors are constant.

✅ Correct Option: 1

Option 1: One factor is constant -> The Law of Variable Proportions operates when at least one factor of production is kept fixed (constant) while other factors are varied. This is a short-run phenomenon where we cannot change all inputs. For example, if land and machinery are fixed, and we keep adding more labor, we observe three stages: increasing returns, diminishing returns, and negative returns. This happens because the fixed factor becomes relatively scarce compared to the variable factor, leading to less efficient combinations of inputs. If all factors could be varied, we would be studying returns to scale instead. -> correct

2025: 22 May Shift 1

A firm produce $q$ amount of output using $x₁$ amount of factor 1 and $x₂$ amount of factor 2.

Match List-I with List-II

List-I	List-II
(A). Cobb-Douglas Production Function	(I). $f(tx_1, tx_2) > t \cdot f(x_1, x_2)$
(B). Constant returns to scale	(II). $f(tx_1, tx_2) < t \cdot f(x_1, x_2)$
(C). Increasing returns to scale	(III). $q = x_1^\alpha x_2^\beta$
(D). Decreasing returns to scale	(IV). $f(tx_1, tx_2) = t \cdot f(x_1, x_2)$

Choose the correct answer from the options given below:

2025: 30 May Shift 1

What is the total variable cost for producing 200 vases?

2026: 20 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Total Cost (TC)	(I) Total variable cost/ Quantity (TVC/Q)
(B) Average Variable Cost (AVC)	(II) Total Fixed Cost / Quantity (TFC/Q)
(C) Short run average cost (SAC)	(III) Total Variable Cost + Total Fixed Cost.
(D) Average fixed cost (AFC)	(IV) Average Variable Cost + Average Fixed Cost.

Choose the correct answer from the options given below:

2025: 28 May Shift 2

At the market price of Rs 10, a firm supplies 200 units of a good. If the market price increases to Rs 30, and the price elasticity of the firm's supply is 2. Then at new price what quantity will be supplied by the firm?

2025: 27 May Shift 2

Average fixed cost curve is actually a ................... curve:

2025: 22 May Shift 2

Suppose that the unit tax imposed by the government is Rs 50. Then, if the firm produces and sells 100 units of the good, the total tax that the firm must pay to the government is ...................

Which one of the following leads to the law of variable proportions?

Solution

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