Micro

Production & Costs

Easy

When a proportional increase in all inputs results in an increase in output by the half proportion, then the production function is said to display which returns to scale?

Increasing returns to scale

Constant returns to scale

Law of variable proportion

Decreasing returns to scale

✅ Correct Option: 4

If all inputs rise in a given proportion but output rises by only half that proportion, output increases less than proportionately to inputs. This is the definition of decreasing returns to scale. The law of variable proportions applies only when one input is varied, not all.

2025: 26 May Shift 2

If the average fixed cost of production is the fixed cost per unit of output produced. Then it will _______.

2025: 3 June Shift 2

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

2025: 30 May Shift 1

What will be the average variable cost (AVC) for producing 200 vases?

2025: 3 June Shift 1

Match List-I with List-II

List-I	List-II
(A) The minimum level of profit that is needed to keep a firm in the existing business.	(I) Super-normal profit
(B) Profit that a firm earns over and above the normal profit.	(II) Loss
(C) AR < AC	(III) Break even point
(D) The point of minimum average cost at which the supply curve cuts the AC curve.	(IV) Normal Profit

Choose the correct answer from the options given below:

2025: 28 May Shift 1

The short run supply curve is represented as?

The rising part of the marginal cost curve.
The rising part of the marginal cost curve from and above the minimum average variable cost curve.
The rising part of the marginal cost curve from and above the minimum average cost curve.
The marginal cost curve.

2025: 13 May Shift 2

In which condition, the average cost of a firm declines when output increases?

When a proportional increase in all inputs results in an increase in output by the half proportion, then the production function is said to display which returns to scale?

Solution

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