Micro

Production & Costs

Medium

With the change in one variable input, keeping the factors constant, if the Marginal Physical Product is positive, the Total Physical Product will be----------

Increases at an increasing rate.

Increases at a diminishing rate.

Initially, it increases at an increasing rate, then increases at a diminishing rate.

Initially, it increases at a diminishing rate, then increases at an increasing rate.

✅ Correct Option: 3

As long as Marginal Physical Product (MPP) is positive, each extra unit of the variable input adds something to output, so Total Physical Product (TPP) keeps rising. Under the law of variable proportions, MPP first rises and then falls while remaining positive; hence TPP first increases at an increasing rate and thereafter at a diminishing rate.

2025: 30 May Shift 2

Choose the correct statements from the options given below in terms of the shapes of the short run cost curves.

(A) Average fixed cost curve is a rectangular hyperbola.

(B) Total fixed cost is horizontal straight line.

(D) Marginal cost is U shaped.

Choose the correct answer from the options given below:

2025: 29 May Shift 2

Choose the correct equations in the context of costs.

(A) TFC = AFC × quantity

(B) LRMC = (TC at $q_n$ units) – (TC at $q_{n-1}$ units)

(D) LRAC = TC/q

Choose the correct answer from the options given below:

2025: 14 May Shift 1

Match List-I with List-II

List–I	List–II
(A) Total variable cost	(I) TR – (TVC + TFC)
(B) Total Revenue	(II) TVCₙ – TVCₙ₋₁
(C) Profit	(III) Average variable cost × Quantity
(D) Marginal cost	(IV) Price × Quantity

Choose the correct answer from the options given below:

2025: 22 May Shift 2

Match List-I with List-II

List-I	List-II
(A) TVC	(I) AVC × quantity
(B) SAC	(II) AVC + AFC
(C) TC	(III) TVC + TFC
(D) LRMC	(IV) (TC at q₁ units) – (TC at q₁ – ₁ units)

Choose the correct answer from the options given below:

2025: 30 May Shift 2

From the following which production function exhibits increasing returns to scale?

2025: 30 May Shift 2

As long as decreasing returns to scale operates, as the firm increases output, the average cost must be ................

With the change in one variable input, keeping the factors constant, if the Marginal Physical Product is positive, the Total Physical Product will be----------

Solution

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