Micro

Production & Costs

Medium

Identify the correct sequence for a firm operating in the short run.

(A) Total product increases at a decreasing rate.

(B) Marginal product becomes zero

(C) Marginal product increases

(D) More and more units of variable factor are employed.

Choose the correct answer from the options given below:

(D), (C), (B), (A)

(B), (C), (A), (D)

(D), (C), (A), (B)

(C), (B), (D), (A)

✅ Correct Option: 3

Option 1 -> Incorrect sequence; doesn't start with employment of variable factors.

Option 2 -> Incorrect; begins with marginal product becoming zero which cannot be the starting point.

Option 3 -> Correct sequence: First, variable factors are employed (D), then marginal product increases initially (C), later total product increases at decreasing rate as diminishing returns set in (A), and finally marginal product becomes zero at maximum total product (B).

Option 4 -> Incorrect; illogical sequence that doesn't follow the law of variable proportions.

Hence, Option 3: (D), (C), (A), (B) -> This sequence correctly follows the Law of Variable Proportions (Law of Diminishing Returns) in the short run. Stage I: The firm employs variable factors which initially show increasing marginal returns. Stage II: After the point of inflection, total product continues to grow but at a diminishing rate (diminishing marginal returns). Stage III: Finally, marginal product reaches zero when total product is maximized. This represents the complete production cycle from initial employment through maximum output. -> correct

2026: 31 May Shift 1

Input	Output	Marginal productivity of factor
$10\ L_1$	$20\ Q_1$	$MP_L = ?$
$12\ L_2$	$25\ Q_2$
$8\ K_3$	$16\ Q_3$	$MP_K = ?$
$10\ K_4$	$20\ Q_4$

Where labour input $L_1$ and $L_2$ are related to output $Q_1$ and $Q_2$ respectively

Capital input $K_3$ and $K_4$ are related to output $Q_3$ and $Q_4$ respectively

Find the values of $MP_L$ and $MP_K$ .

2025: 2 June Shift 1

Stages of production are the consequences of:

2025: 13 May Shift 1

Consider the production function $q = f(x_1, x_2)$ where the firm produces q amout of output $x_1$ amount of factor 1 and $x_2$ amount of factor 2. The firm decides to increase the employment level of both the factors t (t > 1). Identify the equation for decreasing returns to scale from the following.

2025: 13 May Shift 1

________ of an input is defined as the change in output per unit of change in the input when all other inputs are remain constant.

2025: 31 May Shift 1

When output increases with smaller proportion compare to increase in inputs, this return is called?

Decreasing Return to scale
Increasing Return to scale.
Constant Return to scale.
Incremental Productivity.

2026: 15 May Shift 1

An isoquant ________

A. Represents the same level of output and input.

B. Yield the same maximum possible level of output from the set of all possible combinations of two inputs.

C. Yield different level of output from the set of all possible combinations of two inputs.

D. Is an alternative way of presenting the production function.

Choose the correct answer from the options given below:

Identify the correct sequence for a firm operating in the short run. (A) Total product increases at a decreasing rate. (B) Marginal product becomes zero (C) Marginal product increases (D) More and more units of variable factor are employed. Choose the correct answer from the options given below:

Solution

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