Micro

Production & Costs

Medium

Choose the incorrect option from the following with reference to production in the short run.

The law of variable proportions is applicable.

The firm can change more than one factor in short run.

The firm experiences returns to a factor.

The law of diminishing marginal returns is applicable.

✅ Correct Option: 2

Option 1 -> The law of variable proportions applies in short run when one factor varies while others remain fixed.

Option 2 -> This is incorrect as in short run, at least one factor must remain fixed; the firm cannot freely change multiple factors.

Option 3 -> Returns to a factor occur when one input varies while others stay constant, which is the short run scenario.

Option 4 -> Diminishing marginal returns occur in short run when variable input is added to fixed inputs.

Hence, Option 2: The firm can change more than one factor in short run -> By definition, the short run is a production period where at least one factor of production (typically capital) remains FIXED and cannot be changed. Only variable factors (usually labor) can be adjusted. If a firm could change all or multiple factors freely, that would characterize the LONG RUN, not the short run. This fundamental distinction between short run (at least one fixed factor) and long run (all factors variable) makes this option incorrect. -> correct

2026: 19 May Shift 2

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. Short run marginal cost	I. A rectangular hyperbola shaped curve whose value decreases with increase in output.
B. Total fixed cost	II. The shape of this cost curve is U-shaped and its value is undefined at zero output.
C. Average fixed cost	III. An upward sloping curve derived grom the vertical summation of TFC and TVC.
D. Total Cost	IV. A horizontal straight line, the value of which cannot be changed.

Choose the correct answer from the options given below:

2025: 22 May Shift 1

The set of all possible combinations of the two inputs, labour and capital, that yield the same maximum possible level of output is called...........

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: 16 May Shift 1

Which of the following is true regarding supply of a commodity?

(A) Technological progress leads to a decrease in the supply of a commodity.

(B) When the price of inputs rises, the supply curve of the good shifts to the left.

(D) Imposition of a unit tax on a firm shifts the supply curve of the goods produced by the firm to the left.

Choose the correct answer from the options given below:

2025: 28 May Shift 1

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

capital
Input.
Final Output.
Intermediate output

2025: 3 June Shift 2

When the additional unit of input is 'crowded' in the production, the output is proportionally less and............

Choose the incorrect option from the following with reference to production in the short run.

Solution

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