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. At least one factor is fixed and others are variable
C. Technology is changing continuously
D. There are increasing returns to scale
Answer: Option B
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
Which of the following is a feature of the Indian public sector enterprises?
A. Only profit maximisation without any public purpose
B. Complete absence of social objectives
C. No role in strategic sectors
D. Presence of both commercial and social objectives

Correct Answer: Option D


Explanation:
Public sector enterprises in India have historically pursued a combination of commercial viability and broader social and strategic objectives.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Pradhan Mantri Suraksha Bima Yojana' provides insurance against:
A. health expenses
B. accidental death and disability
C. crop loss
D. unemployment

Correct Answer: Option B


Explanation:
PMSBY provides accidental death and disability insurance.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is NOT a source of non-tax revenue for the government of India?
A. Fees and fines
B. Corporation tax
C. Dividends from PSUs
D. Interest receipts

Correct Answer: Option B


Explanation:
Corporation tax is a tax revenue. Interest receipts, dividends from public sector undertakings, and fees and fines are non-tax revenues.

This question belongs to: Economy GK Economy Set 1