What does the Law of variable Proportions show? State the behavi

Subject

Economics

Class

CBSE Class 12

Pre Boards

Practice to excel and get familiar with the paper pattern and the type of questions. Check you answers with answer keys provided.

Sample Papers

Download the PDF Sample Papers Free for off line practice and view the Solutions online.
Advertisement

 Multiple Choice QuestionsShort Answer Type

11.

Explain why firms are mutually interdependent in an oligopoly market.

1954 Views

12.

Define an indifference curve. Explain why an indifference curve is downward sloping from left to right.

529 Views

13.

When price of good is Rs 7 per unit a consumer buys 12 units. When price falls to Rs6 per unit he spends Rs 72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.

509 Views

Advertisement

14.

What does the Law of variable Proportions show? State the behaviour of total product according to this law.


The law of variable proportions state that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline. This means that up to the use of a certain amount of variable factor, marginal product of the factor may increase and after a certain stage it starts diminishing.

Assumptions of Law of Variable Proportions:
1. Constant State of Technology: First, the state of technology is assumed to be given and unchanged. If there is an improvement in the technology, then the marginal product may rise instead of diminishing.

2. Fixed Amount of Other Factors: Secondly, there must be some inputs whose quantity is kept fixed. It is only in this way that we can alter the factor proportions and know its effects on output. The law does not apply if all factors are proportionately varied.

3. Possibility of Varying the Factor proportions: Thirdly, the law is based upon the possibility of varying the proportions in which the various factors can be combined to produce a product. The law does not apply if the factors must be used in fixed proportions to yield a product.

Behaviour of TP


Stages Stage Name TP Range
I Stage of increasing return TP increases at an increasing rate till F From O to point F
II Stage of diminishing return Increases at a decreasing rate and attains maximum at H From F to point H
III Stage of negative return. TP starts to fall From H onwards




912 Views

Advertisement
Advertisement
15.

Explain how changes in prices of other products influence the supply of a given product.

394 Views

16.

Explain how the following influence demand for a good:
Rise in income of the consumer.

781 Views

17. Explain how the following influence demand for a good:
Fall in prices of the related goods.
641 Views

 Multiple Choice QuestionsLong Answer Type

18.

Explain the conditions of a producer’s equilibrium in terms of marginal cost and marginal revenue. Use diagram.

2001 Views

Advertisement
19.

Market for a good is in equilibrium. There is simultaneous increase both in demand and supply of the good. Explain its effect on market price.

733 Views

20.

Market for a good is in equilibrium. There is simultaneous decrease both in demand and supply of the good. Explain its effect on market price.

1340 Views

Advertisement