The marginal product of a variable input is best described as:

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(a)

Total product divided by the number of units of variable input.

(b)

The additional output resulting from one unit increase in the variable input.

(c)

The additional output resulting from one unit increase in both the variable and fixed inputs.

(d)

The ratio of the amount of the variable input that is being used to the amount of the fixed input that is being used.

To economists, the main difference between short run and long run is that:

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(a)

In short run all inputs are fixed, while in long run all inputs are variable.

(b)

In short run the firm varies all of its inputs to find the least cost combination of inputs.

(c)

In short run, at least one of the firm's input level is fixed.

(d)

In long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.

Diminishing returns occur:

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(a)

When units of a variable input are added to a fixed input and total product falls.

(b)

When units of a variable input are added to a fixed input and marginal product falls.

(c)

When the size of the plant is increased in the long run.

(d)

When the quantity of the fixed input is increased and returns to the variable input falls.

The law of variable proportions is drawn under all of the assumptions men tioned below except the assumption that:

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(a)

The technology is changing.

(b)

There must be some inputs whose quantity is kept fixed.

(c)

We consider only physical inputs and not economically profitability in monetary terms.

(d)

The technology is given and stable.

Diminishing marginal returns for the first four units of a variable input is exhibited by the total product sequence:

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(a)

50, 50, 50, 50

(b)

50, 110, 180, 260

(c)

50, 100, 150, 200

(d)

50, 90, 120, 140

When the quantity of a variable input is increased from 3 units to 4 units, the total output increases from 70 units to 85 units. The marginal product of the variable input is 15 units.

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(a) False

(b) True

When the quantity of a variable input is increased from 4 to 6 units, the total output increases from 85 units to 105 units. The marginal product of the variable input is 20 units.

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(a) True

(b) False

When the marginal product of a variable input falls, total product also falls.

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(a) True

(b) False

When there are diminishing returns to a factor, total product always decreases.

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(a) True

(b) False

Total product will increase only when marginal product increases.

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(a) True

(b) False

What is the law of diminishing marginal product?

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(a)

The Law of diminishing marginal product states that when we applied more and more units of variable factor to a given quantity of fixed factor, total product increases at a diminishing rate and marginal product falls.

What is the law of variable proportions?

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(a)

The law of variable proportion states that as we increase the quantity of only one input, keeping other inputs fixed, the total product increases at an increasing rate in the beginning, then increases at decreasing rate and after a level the output ultimately falls.

Give the meaning of production function.

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(a)

The relationship between physical input and physical output of a firm is generally referred to as production function.

In which run some factors of production are fixed and others are variable?

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(a)

Short run.

What change will take place in marginal product when total product increases at a diminishing rate?

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(a)

Marginal product will decline but remains positive.