What is the primary reason for the operation of the Law of Variable Proportions? The presence of fixed and variable inputs in the short run. The presence of only variable inputs in the long run. The absence of fixed inputs in the short run. The absence of variable inputs in the long run.
Question
What is the primary reason for the operation of the Law of Variable Proportions? The presence of fixed and variable inputs in the short run. The presence of only variable inputs in the long run. The absence of fixed inputs in the short run. The absence of variable inputs in the long run.
Solution
The primary reason for the operation of the Law of Variable Proportions is the presence of fixed and variable inputs in the short run.
Here's why:
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The Law of Variable Proportions is a concept in economics that describes the output response from varying the amount of one input while keeping the other inputs constant.
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In the short run, some factors of production are fixed, such as capital (machinery, buildings, etc.), while others are variable, like labor and raw materials.
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When the quantity of the variable input is increased (while the fixed inputs remain constant), the output may initially increase at an increasing rate, then at a constant rate, and finally at a decreasing rate. This is the essence of the Law of Variable Proportions.
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In the long run, however, all factors of production are variable. Therefore, the Law of Variable Proportions does not apply in the long run.
So, the primary reason for the operation of the Law of Variable Proportions is the presence of both fixed and variable inputs in the short run.
Similar Questions
Which of the following is a true statement about the Law of Variable Proportions?It assumes that all units of the variable input are heterogeneous.It is applicable only in the long run.It is applicable only to the agriculture sector.It operates in the short run when at least one factor of production is fixed
How is the Law of Variable Proportions different from the Law of Returns to Scale?The former applies to the long run while the latter applies to the short run.The former deals with variable proportions while the latter deals with fixed proportions.The former assumes that one input is kept constant while the latter assumes that all inputs are varied.The former assumes that all inputs are varied while the latter assumes that one input is kept constant
Which one of the following best defines the Law of Variable Proportions? Output decreases as all inputs increase. Output increases as one input is increased, holding all other inputs constant. Output increases as all inputs increase. Output decreases as one input is increased, holding all other inputs constant.
How does the Law of Variable Proportions help a firm in its production decision? It helps in understanding how to increase the scale of production. It helps in understanding how to minimize cost by utilizing resources optimally. It helps in understanding how to diversify the product line. It helps in understanding how to introduce new technology.
Law of constant proportions is given by whom?
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