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Questions Related to land

To economists, the main difference between the short run and the long run is that _____________.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. in the short run all inputs are fixed, while in the long run all inputs are variable

  2. in the short run the firm varies all of its inputs to find the least-cost combinations of inputs

  3. in the short run, at least one of the firm's inputs levels is fixed.

  4. in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently

Show answer
Correct Option: C
Explanation:

The short run, as economists use the phrase, is characterized by at least one fixed factor of production so the proportion of inputs can be changed, the law of variable proportion will only operate in the short run. In the long run all factors are variable as producers have enough time to organize all factor inputs in the appropriate proportions to achieve the minimum efficient scale.

"Law of diminishing returns" or "Law of variable proportion" operate in ___________.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. long run

  2. short run

  3. very long period

  4. none of the above

Show answer
Correct Option: B
Explanation:

For the law of diminishing returns or variable proportions to operate, at least one factor needs to be fixed, as only then can factor proportions be changed, this happens in the short run. In the long run all factors are variable and thus it is not possible for the law of diminishing returns or law of variable proportions to operate.

The "law of diminishing returns" applies to _________.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. the short run, but not the long run

  2. the long run, but not the short run

  3. both the short run and the long run

  4. neither the short run nor the long run

Show answer
Correct Option: A
Explanation:

For the law of diminishing return to operate at least one factor needs to be fixed, as only then can factor proportions be changed, this happens in the short run. In the long run all factors are variable and thus it is not possible for the law of diminishing returns to operate.

In describing a given production technology, the short run is best described as lasting __________.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. upto six months from now

  2. upto five years from now

  3. as long as all inputs are fixed

  4. as long as at least one input is fixed

Show answer
Correct Option: D
Explanation:

Short run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the short run as long as at-least one factor of production is fixed. 

Which of the following statement is true?

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. In short run, some of the factors of production are fixed and other may vary.

  2. In short run, all the factors of production are fixed.

  3. In short run, all the factors of production are variable.

  4. In short run, there are no fixed factors of production.

Show answer
Correct Option: A
Explanation:
Short run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the short run as long as at-least one factor of production is fixed. 

The term ______ is defined as that length of time over which the firm gets an opportunity to vary if need be the quantities of all its inputs.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. short run

  2. long run

  3. very short period

  4. all of the above

Show answer
Correct Option: B
Explanation:
Long run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the long run when it has the opportunity to vary all factors of production.

In the long run production function all inputs are fixed.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. True

  2. False

  3. Partly true

  4. None of the above

Show answer
Correct Option: B
Explanation:

In the long run all factors are variable as the firm has enough time and other resources to vary any of its factors of production.

In the long run _________. 

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. all inputs, such as labour, equipment and offices or factories can be varied, and so total variable cost is equal to total cost since fixed cost is equal to zero

  2. all inputs except labour can be varied, and so total variable cost remains unchanged but fixed cost is equal to zero

  3. all inputs, such as labour, equipment and offices or factories can be varied, and so average fixed cost is lower

  4. All inputs such as labour, equipment and offices or factories can be varied, and so total variable and fixed cost are lower

Show answer
Correct Option: A
Explanation:
In the long run all factors are varied. The proportion of inputs are scaled up or down in order to produce at the minimum efficiency scale (long run minimum average cost). Thus, in the long run the total cost is the total variable cost as there is no fixed cost involved.

Which of the following is an assumption in the Law of Variable Proportions?

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. The Fixed Factor of production is scarce

  2. There are no perfect substitutes for the Fixed Factor

  3. Factors of Production can be used in any proportion

  4. All of the above

Show answer
Correct Option: D

Law of Returns to Scale indicates the responsiveness of total product when all inputs ________________.

economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

  1. Remain same

  2. Are changed drastically

  3. Are changed marginally

  4. Are changed proportionately

Show answer
Correct Option: D