In the Cobb-Douglas production function Q = A L^α K^β, if α + β = 1, the production function exhibits: MCQ with Answer and Explanation

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In the Cobb-Douglas production function Q = A L^α K^β, if α + β = 1, the production function exhibits:

A. decreasing returns to scale

B. constant returns to scale

C. increasing returns to scale

D. negative returns

Answer: Option B

Solution (By JKSSB Mock Tests)

If α + β = 1, the Cobb-Douglas production function exhibits constant returns to scale.

This question belongs to: Economy GK Economy Set 1

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The term 'Soft Loan' typically refers to:

A. Only short-term trade credit

B. Only domestic commercial bank loans

C. Loans with commercial interest rates

D. Loans with concessional interest rates and longer repayment periods

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Correct Answer: Option D

Explanation:
Soft loans are provided by multilateral agencies or governments at below-market interest rates with longer maturities and grace periods, often for development purposes.

This question belongs to: Economy GK Economy Set 1

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The 'KUSUM' scheme aims to promote:

A. biogas in urban areas

B. wind energy in industries

C. nuclear power

D. solar power in agriculture

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Correct Answer: Option D

Explanation:
PM-KUSUM promotes solar power in agriculture including solar pumps and grid-connected solar plants.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Opportunity Cost' is best defined as:

A. The value of the next best alternative forgone

B. The cost of producing one more unit of a commodity

C. The total cost incurred in production

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Correct Answer: Option A

Explanation:
Opportunity cost refers to the value of the next best alternative that is sacrificed when a choice is made. It is a fundamental concept in economics.

This question belongs to: Economy GK Economy Set 1

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