In the context of production, the law of diminishing returns applies when: MCQ with Answer and Explanation

In the context of production, the law of diminishing returns applies when:
A. All factors are variable
B. Technology is changing continuously
C. At least one factor is fixed and others are variable
D. There are increasing returns to scale
Answer: Option C
Solution (By JKSSB Mock Tests)
The law of diminishing returns (or variable proportions) operates in the short run when one or more factors are fixed and additional units of a variable factor are added.

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Practice More Economy Set 1 Questions

Question #1
The 'Food Corporation of India' procures food grains at:
A. market price
B. free of cost
C. minimum export price
D. Minimum Support Price

Correct Answer: Option D


Explanation:
FCI procures food grains at Minimum Support Price.

This question belongs to: Economy GK Economy Set 1
Question #2
The New Economic Policy of 1991 was based on the principles of:
A. liberalization, privatization and globalization
B. import substitution and trade restrictions
C. nationalization and central planning
D. land reforms and cooperatives

Correct Answer: Option A


Explanation:
The 1991 New Economic Policy was based on liberalization, privatization and globalization.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'Union Public Service Commission' is constituted under which article?
A. Article 330
B. Article 320
C. Article 324
D. Article 315

Correct Answer: Option D


Explanation:
UPSC is constituted under Article 315.

This question belongs to: Economy GK Economy Set 1