Tag: production

Questions Related to production

If Stage I = Increasing Returns, Stage II = Diminishing Returns, and Stage III = Negative Marginal Returns, answer the questions:
A Rational Producer will not operate in Stage I due to the reason that -

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. There is more scope for making the best use of the Fixed Factor

  2. Total Output still shows an increasing trend

  3. Optimal Combination of Fixed and Variable Factors is not yet achieved

  4. All of the above

Show answer
Correct Option: D

In which stage of production would a rational entrepreneur like to operate?

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Stage 1 where MP is maximum

  2. Stage 2 where both MP and AP are decreasing, but both are positive

  3. Stage 3 where MP is negative

  4. Either Stage 2 or 3

Show answer
Correct Option: B

A Rational Producer intends to work in-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Stage of Constant Returns

  2. Stage of Increasing Returns

  3. Stage of Diminishing Returns

  4. Stage of Negative Returns

Show answer
Correct Option: C

You are given the following data:

Factor Output
0 0
1 15
2 35
3 60
4 92
5 140

The above data is an example of:

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Decreasing returns to scale.

  2. Constant returns to scale.

  3. Increasing returns to scale.

  4. Positive fixed costs.

Show answer
Correct Option: C

If a change in scale inputs leads to a proportional change in the output, it is a case of-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Increasing Returns to Scale

  2. Constant Returns to Scale

  3. Diminishing Returns to Scale

  4. Variable Returns to Scale

Show answer
Correct Option: B

If as a result of a 50% increase in all inputs, the output rises by 75%, this is a case of:

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Increasing Returns to a Factor

  2. Increasing Returns to Scale

  3. Constant Returns to a Factor

  4. Constant Returns to Scale

Show answer
Correct Option: B

In the very beginning of production generally, the Increasing Returns to scale is found because-

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. Input is increased

  2. Plant and Machinery will be new

  3. Production Problems are less

  4. Economies of Scale

Show answer
Correct Option: D

A rational producer will always operate in which stage of law of variable proportion?

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. increasing returns.

  2. diminishing returns.

  3. constant returns.

  4. negative returns.

Show answer
Correct Option: B

Second stage of law of variable proportion ends where __________.

economics laws of returns - returns to a factor and returns to scale total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function

  1. MP is zero

  2. AP is maximum

  3. MP is falling

  4. none of the above

Show answer
Correct Option: A