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. There are increasing returns to scale
C. At least one factor is fixed and others are variable
D. Technology is changing continuously
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 'Comptroller and Auditor General' of India submits audit reports to:
A. RBI Governor
B. Prime Minister
C. Finance Minister
D. President

Correct Answer: Option D


Explanation:
CAG submits audit reports to the President or Governor.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Swachh Bharat Mission' consists of two components: rural and:
A. industrial
B. defence
C. agricultural
D. urban

Correct Answer: Option D


Explanation:
Swachh Bharat Mission has rural and urban components.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'GST' is a value-added tax because:
A. it is a direct tax
B. it is collected at source
C. it is levied on turnover
D. input tax credit is available

Correct Answer: Option D


Explanation:
GST is a value-added tax because input tax credit avoids cascading.

This question belongs to: Economy GK Economy Set 1