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Questions and Answers
What does production in economics refer to?
What does production in economics refer to?
- Transformation of inputs into outputs (correct)
- Acquisition of raw materials
- Marketing of goods and services
- Distribution of final products
What does the Law of Variable Proportions/Law of Diminishing Returns state?
What does the Law of Variable Proportions/Law of Diminishing Returns state?
- When one factor is increased, the marginal and average product increase indefinitely
- When one factor is increased keeping others fixed, the marginal and average product eventually declines (correct)
- When one factor is increased, all other factors increase proportionally
- When one factor is increased, the total product remains constant
What happens to the marginal and average product as per the Law of Variable Proportions?
What happens to the marginal and average product as per the Law of Variable Proportions?
- They decrease initially and then increase
- They increase indefinitely when one factor is increased
- They eventually decline when one factor is increased (correct)
- They remain constant when one factor is increased
According to the Law of Variable Proportions, what happens when one factor is increased while keeping others fixed?
According to the Law of Variable Proportions, what happens when one factor is increased while keeping others fixed?
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How is the Law of Variable Proportions also known?
How is the Law of Variable Proportions also known?
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What does production in economics refer to?
What does production in economics refer to?
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What happens to the output when the quantities of a variable factor are increased to a fixed factor?
What happens to the output when the quantities of a variable factor are increased to a fixed factor?
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How many stages are there in the Law of Variable Proportions?
How many stages are there in the Law of Variable Proportions?
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