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For which of the following fields, is the Cobb-Douglas Production Function applicable?
I Agriculture
II Industries
III Experiments in Agriculture

I only

II only

III only

I and II

I and III

If a proportional change in input combination results in a proportional change in output, the returns to scale will be: I Increasing Returns II Decreasing Returns III Constant Returns

I only

II only

III only

I and II

II and III

For the Firm’s Production Function, “the Short Period” is:

Less than one week

From one month to three months

From one month to six months

From one month to twelve months

None of these

If the firm’s production function is homogenous, the Law of Constant Returns to Scale applies

True

False

True when the Homogenous Production Function is of the First degree

False when the Homogenous Production Function is of the First degree

Incomplete information

In real practice, the Production Function is empirically measured with the help of:

Experiments conducted in agriculture

Technical information provided by engineers

Statistical analysis of cross sections

Statistical analysis of time series data

All of the above

If the production process has increasing returns to scale, the returns to a variable factor of production are:

Double of the returns to the fixed factor

Half of the returns to the fixed factor

Increasing at double the rate

Decreasing at double the rate

Cannot be determined unless the quantum of increasing returns is known

The input combination of a production process has 20 percent fixed costs, 30 percent raw materials and 10 percent labour. Fixed assets remain constant but the quantity of other inputs is increased by 50 percent. This results in:

Law of variable proportions

Returns to scale

Constant returns to scale

Decreasing returns to scale

Increasing returns to scale

Which concept in the Theory of Consumption is similar to the concept of Expansion Path in the Theory of Production?

Price Line

Income Consumption Curve

Iso Cost Lines

Price Consumption Curve

None of these

Returns to scale are applicable if:

The quantity of some inputs is changed, while that of others remains constant

The quantity of all inputs are changed

The quantity of just one input is changed

The quantity of all inputs is not changed

All of the above

The ‘Expansion Path’ is the locus of points of the producer’s equilibrium when:

The cost of both inputs fall

Money outlay of the entrepreneur is changed

The price of input X is changed

The state of technology is changed

All of the above

I only

II only

III only

I and II

I and III

If a proportional change in input combination results in a proportional change in output, the returns to scale will be: I Increasing Returns II Decreasing Returns III Constant Returns

I only

II only

III only

I and II

II and III

For the Firm’s Production Function, “the Short Period” is:

Less than one week

From one month to three months

From one month to six months

From one month to twelve months

None of these

If the firm’s production function is homogenous, the Law of Constant Returns to Scale applies

True

False

True when the Homogenous Production Function is of the First degree

False when the Homogenous Production Function is of the First degree

Incomplete information

In real practice, the Production Function is empirically measured with the help of:

Experiments conducted in agriculture

Technical information provided by engineers

Statistical analysis of cross sections

Statistical analysis of time series data

All of the above

If the production process has increasing returns to scale, the returns to a variable factor of production are:

Double of the returns to the fixed factor

Half of the returns to the fixed factor

Increasing at double the rate

Decreasing at double the rate

Cannot be determined unless the quantum of increasing returns is known

The input combination of a production process has 20 percent fixed costs, 30 percent raw materials and 10 percent labour. Fixed assets remain constant but the quantity of other inputs is increased by 50 percent. This results in:

Law of variable proportions

Returns to scale

Constant returns to scale

Decreasing returns to scale

Increasing returns to scale

Which concept in the Theory of Consumption is similar to the concept of Expansion Path in the Theory of Production?

Price Line

Income Consumption Curve

Iso Cost Lines

Price Consumption Curve

None of these

Returns to scale are applicable if:

The quantity of some inputs is changed, while that of others remains constant

The quantity of all inputs are changed

The quantity of just one input is changed

The quantity of all inputs is not changed

All of the above

The ‘Expansion Path’ is the locus of points of the producer’s equilibrium when:

The cost of both inputs fall

Money outlay of the entrepreneur is changed

The price of input X is changed

The state of technology is changed

All of the above

This test on Microeconomics assesses your knowledge on the basics of the Production Function, the Expansion Path and most important Returns to Scale. The test also contains a few questions on the Short term Production Function. This helps you recall and revise the difference between the two Laws of Returns: Law of Variable Proportions and Law of Returns to Scale. Attempt all Multiple Choice questions in just 7 min. This test is a must for any student of AP Microeconomics. It offers a quick revision of the concept of Production Function.

Economics Production Production Function Production Theory Laws of Returns Law of Variable Proportions Law of Returns to Scale Expansion Path Returns to Scale Economics AP Microeconomics AP AP Microeconomics AP Economics

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