Micro

Production & Costs

Medium

Which of the following is not true?

The production function of a firm is a monetary relationship between inputs used and output produced by the firm.

The production function gives the maximum quantity of output that can be produced.

A production function deals only with the efficient use of inputs.

A production function is defined for a given technology.

✅ Correct Option: 1

Option 1 -> Statement 1 claims production function is a monetary relationship, but it's actually a technical/physical relationship.

Option 2 -> Statement 2 is true - production function shows maximum output from given inputs.

Option 3 -> Statement 3 is true - production function assumes technical efficiency.

Option 4 -> Statement 4 is true - production function is defined for a given technology level.

Hence, Option 1 -> The production function is a TECHNICAL or PHYSICAL relationship, not a monetary relationship. It shows how physical quantities of inputs (labor, capital, raw materials) are transformed into physical quantities of output. The monetary aspect is covered by the cost function, which considers input prices. This fundamental characteristic makes Statement 1 incorrect. -> correct

2025: 13 May Shift 2

In given production function $q = f(x_1, x_2)$ what is depicted by $f(tx_1, tx_2) < tf(x_1, x_2)$ .

2025: 30 May Shift 2

The collection of all possible combinations of goods and services that can be produced from a given amount of resources and a given stock of technological knowledge.

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 ...................

2025: 26 May Shift 2

A profit-maximizing firm will attain its equilibrium at that level of output where?

2025: 30 May Shift 2

Arrange the given statements to show the impact on a firm's supply curve due to its determinants.

(A) Organisational innovation allows the firm to use fewer units of inputs.

(B) Any factor that affects a firm's marginal cost curve is a determinant of its supply curve.

(D) The marginal cost will shift downward.

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Consider a production function $q = f (x_1, x_2)$ where the firm produces q amount of output using $x_1$ amount of factor 1 and $x_2$ amount of factor 2. Now suppose the firm decides to increase the employment level of both the factors t (t > 1) times.

Identify the correct statement from the following.

Which of the following is not true?

Solution

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