Factors of Production and Returns to Scale Quiz
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Questions and Answers

What do ISO quants represent?

  • Different circular possibilities
  • Different cost possibilities
  • Different production possibilities (correct)
  • Different revenue possibilities

    • ISO quants are equal to?

  • Revenue lines
  • Product Lines (correct)
  • Cost lines
  • Indifference curves

    • What are ISO quants also known as?

  • Production possibility curves
  • Production indifference curves (correct)
  • Indifference curves
  • None of the above

    • At the equilibrium point, an ISO quant is ________ to an ISO cost line:

    <p>Tangent</p> Signup and view all the answers

    What does an ISO quant show?

    <p>All the alternative combinations of two inputs that yield the same total product.</p> Signup and view all the answers

    In economics, what do ISO quants represent?

    <p>Different resource allocations</p> Signup and view all the answers

    What does a change in scale mean in production?

    <p>All factors of production are increased or decreased</p> Signup and view all the answers

    What is it called when an increase in all inputs leads to less than a proportional increase in output?

    <p>Decreasing returns to scale</p> Signup and view all the answers

    What stage is it when output decreases by 20% due to an increase in inputs by 20%?

    <p>None of the above</p> Signup and view all the answers

    What are Constant Returns to Scale also known as?

    <p>Linear Homogenous</p> Signup and view all the answers

    In Hariharan's case where his production increased by only 80% instead of 100% after increasing all factors by 100%, which law of returns to scale is operating?

    <p>Decreasing returns to scale</p> Signup and view all the answers

    When output increases in a smaller proportion with an increase in all inputs, what kind of returns to scale set in?

    <p>Constant returns to scale</p> Signup and view all the answers

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