Laws of Variable Proportion - SS2 Economics Past Questions and Answers - page 1
What is the law of variable proportions?
As inputs increase, the output always increases proportionally
As inputs increase, output increases at a decreasing rate
As inputs increase, output decreases at an increasing rate
As inputs increase, output remains constant
(At some point, adding more of a particular input will no longer result in a proportional increase in output)
What is another name for the law of variable proportions?
The law of constant returns
The law of increasing costs
The law of diminishing returns
The law of supply and demand
Which of the following is an example of the law of variable proportions?
Eating more food will make you feel more full
Adding more workers to a production line will always increase output
Adding more fertilizer to a field will always increase crop yields
Adding more water to a plant will always make it grow taller
What is the importance of the law of variable proportions in economics?
It helps us understand how changes in inputs affect output
It helps us understand how changes in output affect inputs
It helps us understand how changes in inputs affect prices
It helps us understand how changes in prices affect inputs
At what point does the law of variable proportions come into effect?
When input levels are low
When input levels are high
When input levels are constant
When input levels are variable
( When inputs are at their highest, any additional units employed beyond that will cause the production of output to be less efficient and productive)
Give an example of how the law of variable proportions applies in the real world.
One example is a restaurant trying to increase the production of a popular dish by adding more cooks. Initially, adding more cooks may result in a proportional increase in the number of dishes produced. However, as more and more cooks are added, the kitchen may become overcrowded and inefficient, leading to a decreasing rate of increase in production.
Given the law of variable proportion, how can firms optimize their production processes?
Firms can optimize their production processes by carefully monitoring the input levels of each factor of production and adjusting them accordingly to achieve maximum efficiency. This may involve finding the optimal balance between inputs, such as labour and capital, to ensure that each input is being used in the most effective way possible. Additionally, firms may need to invest in new technologies or processes to increase the productivity of their inputs and maintain a high level of output.