Tag: production and law of variable proportions

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Multiple choice 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?

In the long run production function all inputs are fixed.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the long run, all inputs are variable. The statement that all inputs are fixed in the long run is incorrect; that condition applies to the very short period or is simply false by definition.

Multiple choice 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?

In the long run there is enough time for the firm to cover its losses and earn normal profits. This is because in the long run, all inputs are __________.

  1. identical

  2. homogenous

  3. variable

  4. fixed
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In the long run, firms have sufficient time to adjust all factors of production, meaning all inputs become variable. This flexibility allows firms to optimize their scale of operations.

Multiple choice 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?

The period of time in which the plant capacity can be varied is known as __________.

  1. the short period

  2. the market period

  3. the long period

  4. all of the above.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The long period is defined as a time frame long enough for a firm to change its plant capacity, which involves adjusting fixed factors like capital and machinery.

Multiple choice 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?

In the case of very short period ______ is variable.

  1. land

  2. capital

  3. labour

  4. none of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In the very short period (market period), the supply is fixed because there is no time to adjust any factors of production. Therefore, none of the listed factors (land, capital, labour) are variable.

Multiple choice 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?

In short run when the level of production increases, average fixed cost will____.

  1. remain same

  2. decrease

  3. increase

  4. all the three possible depending upon the merit of case
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The AFC curve is asymptotic to to both the x and y axis as the fixed cost can never be 0 since fixed cost is positive. It slopes downwards throughout its length from left to right showing continuous fall in average fixed cost with an increase in output. 

Multiple choice 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?

In the long run ___________.

  1. all inputs are fixed

  2. all inputs are variable

  3. some inputs are fixed and rest are variable

  4. a few are variable and rest are fixed
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the long run all inputs are variable as there is enough time for all factors to adjust according to the requirements for achieving least cost output. 

Multiple choice 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?

____ refers to that period in which supply of a commodity can be increased or decreased depending upon changed condition of demand. 

  1. Very short period

  2. Short period

  3. Long period

  4. Very long period
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The long period provides sufficient time for firms to adjust their production capacity in response to changes in market demand, making supply more elastic.

Multiple choice 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?

Which of these statement is more appropriate for Fixed costs ____________?

  1. Fixed cost is fixed only in short run

  2. It is fixed in long run also

  3. It varies with the change in level of output

  4. It is strictly avoidable in short run also
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Fixed costs are defined by their inability to change with the level of output in the short run. In the long run, all costs become variable as the firm can adjust its scale.

Multiple choice 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?

In the short run with the increase in output ____________.

  1. The fixed cost also increases

  2. Total variable cost increase in totality but total fixed cost remain same

  3. Total variable cost falls along with fixed cost

  4. Average variable cost falls
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the short run, at least one factor of production is fixed. As output increases, the firm must use more variable inputs, which increases the total variable cost, while total fixed costs remain constant.

Multiple choice 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?

Whether a firm will plan for short-run or long-run production depends upon the __________.

  1. nature of demand for its product

  2. availability of inputs

  3. state of technology

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A firm's decision to plan for the short run or long run depends on various strategic factors including market demand, resource availability, and technological capabilities. All these factors influence the flexibility and scale of production planning.