Chapter 4: Production Function Very Short Questions and Answers
Q1: Define production.
Answer: Addition to utility should be regarded as production which brings about an addition in the value of goods.
Q2: Define Average Product.
Answer: Average product refers to output per unit of a variable input. Mathematically, it is Total Product divided by the amount of variable factor.
Q3: Define production function.
Answer: Production function may be defined as the technological relationship between physical inputs and the maximum producible output.
Q4: Write the equation for the production function.
Answer: Qx = f(L,K).
Q5: Define short period.
Answer: the Short period is the period of time in which a firm can change only some factors of production (say labour)
Q6: Define long period.
Answer: the Long period is a time period during which firms can change any of the factors of production.
Q7: Give two types of production function.
Answer:
(i) Combination of inputs in variable proportions.
(ii) Combination of inputs in fixed proportions.
Q8: What is meant by fixed factors of production?
Answer: Fixed factors of production are the factors whose supply is fixed i.e., whose quantity cannot be increased.
Q9: What is meant by variable factors of production?
Answer: Variable factors of production are the factors of production which can be changed e.g., labour.
Q10: In which period are some factors of production fixed and others variable?
Answer: Short period.
Q11: In which period are all the factors of production variable?
Answer: Long period.
Q12: What is the total product of an input?
Answer: the Total product of an input means the total output at a particular level of employment of an input when the employment of all other inputs is unchanged.
Q13: What change will take place in the marginal product when total product increases at a diminishing rate?
Answer: Marginal product will be decreasing.
Q14: What is the behaviour of total product in the first stage of the law of variable proportions?
Answer: Total product is convex.
Q15: What is the behaviour of total product in the second stage of the law of variable proportions?
Answer: Total product is concave.
Q16: What is the behaviour of total product in the third stage of the law of variable proportions?
Answer: Total product is downward sloping.
Q17: How is the total physical product derived from the marginal physical product schedule?
Answer: Total physical product is derived by summing up the marginal physical product. It means that the total physical product is equal to the sum of the marginal physical product.
Q18: What will you say about the marginal physical product of a factor when the total physical product is falling?
Answer: When the total physical product is falling, the marginal physical product would be negative.
Q19: What is the general shape of the MRP curve and APP curve?
Answer: Inverse ‘U’.
Q20: What causes the production to increase at a rapid rate in the initial stage when units of a variable factor are increased?
Answer: As more units of a variable factor are added to a fixed factor, fixed factors are more effectively utilized which causes the production to increase at a rapid rate in the initial stage.
Q21: What is the size of the total product when marginal product is zero?
Answer: The total product will be maximum at a point where marginal product is zero.
Q22: When is average product maximum?
Answer: Average product is maximum when marginal product is equal to average product.
Q23: What is MP when TP reaches its maximum
Answer: zero
Q24: What happens to the marginal product when total product increases at diminishing rate?
Answer: Marginal product starts falling.
Q25: What are the shape of the marginal product curve and the average product curve?
Answer: Both the marginal product and the average product curves are inverse ‘U’ shaped.
Q26: At which point does the marginal product curve cut the average product curve?
Answer: The marginal product curve cuts the average product curve from above at the maximum point of the average product curve.
Q27: As the variable input labour is increased by one unit, total output falls, what would you say about the marginal productivity of labour?
Answer: Marginal productivity of labour is negative.
Q28: When total product increases at an increasing rate, what happens to the marginal product?
Answer: Marginal product increases at a faster rate.
Q29: Give the meaning of “Returns to a factor”.
Answer: Returns to a factor means an increase in the output by increasing only one factor of production.
Q30: Give the meaning of returns to scale.
Answer: Returns to scale means an increase in the output by increasing all the factors of production in a fixed proportion.
Q31: Define the law of variable proportions.
Answer: According to the law of variable proportions, as increased quantities of one factor are combined with other fixed factors, the marginal product of variable factor may rise initially but declines eventually.
Q32: Which time period is considered in the law of variable proportions?
Answer: Short period.
Q33: Which of the stages of the law of variable proportions is relevant for a firm which aims at maximum efficiency or profits?
Answer: the Second Stage.
Q34: In which stage of the law of variable proportions, total product, average product and marginal product decline?
Answer: the Third stage.
Q35: What is the law of diminishing marginal product?
Answer: Law of diminishing marginal product states that keeping other inputs constant, an increase in the variable input will cause the marginal product to decrease after a certain level.
Q36: When total product increases at a decreasing rate, what happens to the marginal product?
Answer: the Marginal product should be decreasing.
Q37: Define Law of Variable Proportions.
Answer: It states that only one input is increased other remaining unchanged.
☛See also:
Economics -Sample Question Paper with Marking Scheme (2014-15)
Economics - Sample Question Paper (2015)
Economics - Sample Question Paper (2016-17)
Economics - Question Paper (Delhi Region) (2016-17) and Marking Scheme / Answers
Economics - Sample Question Paper (2017-18)
Chapter 1 - Introduction to Economics (Very Short Question Answers)
Economics - Ch1 Introduction of Economics (Worksheet)
Chapter - Banking - Important Banking Concepts
Chapter 4: Production Function (Very Short Question Answers)
No comments:
Post a Comment
We love to hear your thoughts about this post!
Note: only a member of this blog may post a comment.