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1.

Let the production function of a firm be : `Q=2L^(2)K^(2)`. Find out the maximum possible output that the firm can produce with 5 units of L and 2 units of K. What is the maximum possible output that the firm can produce with zero unit of L and 10 units of K ?

Answer» Maximum possible output with 5 units of L and 2 units of K
Given : `Q=2L^(2)K^(2)` and `L=5` units, `K=2` units
Putting the values of L and K in the given production function, we get :
`Q=2(5)^(2) (2)^(2) =200` units
Maximum possible output with 0 unit of L and 10 units of K
Given : `Q=2L^(2)K^(2)` and `L=0` unit, `K=10` units
Putting the values of L and K in the given production function, we get:
`Q=2(0)^(2) (10)^(2)=0` unit.
Discussion
2.

Let the production function of a firm be : `Q=5L^(½)K^(½)`. Find out the maximum possible output that the firm can produce with 100 units of L and 100 units of L and 100 units of K.

Answer» Given: `Q=5L^(½)K^(½), L=100` units, `K=100` units
Putting the values of L and K in the given production function, we get :
`Q=5(100)^(½)(100)^(½)`
i.e., `Q=5 sqrt(100). sqrt(100)`
Q or Maximum output `= 500` units
Discussion
3.

Find out the maximum possible output for a firm with zero unit of L and 10 units of K when its production function is : `Q=5L+2K`.

Answer» Given : `Q=5L+2K`. And `L=0` units, `K=10` units
Putting the values of L and K in the f=given production, we get:
`Q=5(0)+2(10)`
Q or Maximum output `= 20` units.
Discussion
4.

4 units of a factor of production produce 100 units of output, and 5 units produce 120 units of output, Calculate MP of that factor.

Answer» `"MP of 5 units"="TP of 5 units"-"TP of 4 units"=120-100="20 units."`
Discussion
5.

Giving reasons, state whether the following statements are true or false : (i) When there are diminishing returns to a factor, total product always decreases. (ii) Total product will increase only when marginal product increases.

Answer» (i) False. Total production decreases only when negative returns operate.
(ii) False. Total product increases upto the point where MP is positive.
Discussion
6.

According to Law of Variable Proportions, there are _______ phases.A. 1B. 3C. 2D. 4

Answer» Correct Answer - B
Discussion
7.

When average product increases, the marginal product is :A. Less than average productB. Equal to the average productC. More tha average productD. None of these

Answer» Correct Answer - C
Discussion
8.

Which phase of Law of Viriable Proportions has been ruled out on the grounds of technical inefficiency :A. Increasing returns to a factorB. Diminishing returns to a factorC. Negative returns to a factorD. None of these

Answer» Correct Answer - C
Discussion
9.

In describing a given production technology, the short run is best described as lasting :A. Up to six months from nowB. Upto five years from nowC. As long as all inputs are fixedD. As long as at least one input is fixed

Answer» Correct Answer - D
Discussion