3. Theory of Production - Exercise

 Exercise - Theory of Production

Very Short Answer Questions                                                             2 Marks

1. Define production.
2. What do you mean by production function?
3. Define short-run production function?
4. What are the differences between short-run and long-run production function?
5. Define TP and MP
6. What is meant by average product?
7. What is meant by marginal product?
8. Discuss the relationship between MP and TP in short-run.
9. Explain the nature of MP in short run.
10. What is the law of variable proportion?
11. What are the assumptions of the law of variable proportion?
12. State the law of returns to scale.
13. Define three stages of returns to scale.
14. What is the meaning of constant returns to scale?
15. What is increasing returns to scale?
16. Why does the law of diminishing returns to scale operate?
17. Why does the law of increasing returns to scale operate?
18. Distinguish between the law of variable proportions and the law of returns to scale.

Short Answer Questions                                                                      5 Marks

1. What is production function? Explain its types.
2. Explain about short-run and long-run production function.
3. What is total product? Derive the total product curve with the help of a table.
4. What is average product? Derive the average product curve with the help of a table.
5. What do you mean by marginal product? Derive marginal product curve with the help of a table.
6. Describe the nature of marginal product curve.
7. Define AP, MP and TP and show their relation.
8. Explain the concept of TP, AP and MP with a suitable example.
9. Discuss about the relationship between marginal product and total product in short-run?
10. Explain the nature of AP curve in law of variable proportion.
11. Explain law of variable proportion.
12. Does law of variable proportion apply only in agriculture?
13. Explain the law of return to scale.
14. What is returns to scale? Explain the nature of constant returns to scale.
15. Explain diagrammatically the law of increasing return to scale.
16. Explain the constant returns to scale.
17. Explain the diminishing returns to scale.

Long Answer Questions                                                                      10 Marks

1. Explain the concept of TP, AP and MP with suitable example.
2. Explain the concept of TP, AP and MP with the help of a figure.
3. Discuss the definition of Average Product (AP), Marginal Product (MP) and Total Product (TP) and show the relationship between them.
4. State and explain the law of variable proportion.
5. State and explain the law of proportionality. Does it apply mostly to agriculture?
6. Explain the three phases of the law of variable proportions with the help of a diagram.
7. Discuss the law of returns to scale. What are its assumptions?
8. What is returns to scale? Explain the nature of constant return to scale.