Micro

Production & Costs

Medium

If the marginal rate of transformation is constant throughout, the production Possibilities Frontier will be

Downward sloping and concave to the origin.

Downward sloping and convex to the origin.

Downward sloping and linear.

Upward sloping straight line.

✅ Correct Option: 3

Option 1 -> A concave PPF indicates increasing MRT, not constant.

Option 2 -> A convex PPF indicates increasing opportunity costs with varying MRT.

Option 3 -> A linear PPF has constant slope throughout, meaning constant MRT.

Option 4 -> PPF is always downward sloping due to trade-offs between goods.

Hence, Option 3: Downward sloping and linear -> When the Marginal Rate of Transformation (MRT) is constant, the opportunity cost of producing one good in terms of another remains the same throughout. This constant slope results in a straight line (linear) PPF. The PPF is downward sloping because resources are scarce and producing more of one good requires sacrificing some amount of the other good. A linear PPF implies constant opportunity costs, which occurs when resources are perfectly substitutable between the production of two goods. -> correct

2026: 11 May Shift 1

The given the Cobb-Douglas production function

$Q = L^{2/3}K^{1/3}$ , which of the following is correct about this production function?

A. The firm produces Q amount of output using L and K inputs only.

B. The given production function exhibits decreasing returns to scale.

C. The given production function exhibits constant returns to scale.

D. The given production function exhibits increasing returns to scale.

Choose the correct answer from the options given below:

2025: 26 May Shift 2

Which of the following central problems deals with the choice of technique of production?

2026: 21 May Shift 2

Select the correct statements in respect to the relationship between short-run cost curves.

A. Marginal cost (SMC), average variable cost(AVC) and short run average cost curves(SMC) are 'U' shaped.

B. SMC curve cuts the AVC curve from below at the minimum point of AVC.

C. AVC curve cuts the SMC curve from below at the minimum point of SMC.

D. SMC curve cuts the SAC curve from below at the minimum point of SAC.

Choose the correct answer from the options given below:

2026: 23 May Shift 1

The Total Fixed Cost of producing a good is Rs. 20. The Total Cost of producing 3 units of a good is Rs. 44 while that of producing 4 units is Rs. 49. What would be the Marginal Cost of producing the 4th unit of the good?

2025: 3 June Shift 2

If all the resources are used in the production of cloth, the curve which gives the maximum amount of cloth produced in the economy for any given amount of machine is called?

2025: 15 May Shift 1

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

If the marginal rate of transformation is constant throughout, the production Possibilities Frontier will be

Solution

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CUET Economics Past Year Questions (Topic-Wise)