Download App

Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost3 Marks
Question
Distinguish between:
  1. Short run and Long run.
  2. Returns to variable factor and Returns to scale.
✓

Answer

  1. During short run/ period both kind of inputs, i.e., fixed and variable exist simultaneously, whereas in the long run/period only variable inputs exist because even the fixed inputs of the short period become variable in the long period. In the short run, all factors of production cannot be changed in the same proportion, but in the long run, all factors of production can be changed in the same proportion.
  2. Returns to a variable factor (short period phenomenon) is termed as the "Law of Variable Proportion,” because it shows the effect of a change in Total Product and Marginal Product when the ratios between fixed and variable factors keep on changing, as additional units of variable factor are employed, whereas Returns to Scale (long period phenomenon) refers to all factors of production being variable, so that there is no fixed factor in the long run. Thus, when due to change in scale of production, Total Product changes, it is known as “Returns to Scale."

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "3 Marks Question" from Production and cost→Production and cost — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

Suppose a consumer whose income is ₹ 30 wants to consume two goods which are priced ₹ 5 each.
  1. Write down all the bundles that are available to the consumer.
  2. Among the bundles that are available to the consumer, identify those which cost him exactly ₹ 30.
→
Explain any two factors that affect the price of elasticity demand.
OR
How do the following affect the price elasticity of demand?
  1. Number of substitutes available for the good.
  2. Proportion of income spent on the good.
  3. Nature of the good.
→
Quantity demanded of a commodity rises by $6$ units, when its price falls by $1$ per unit. Its Price Elasticity of Demand is $(-) 1$.
If the price before the change was $₹ 20$ per unit, calculate quantity demanded at this price.
→
Define Average Revenue. Show that Average Revenue and Price are same.
→
Mean marks obtained by 100 students are estimated to be 40. Later on it is found that one value was read as 83 instead of 53. Find out the 'corrected' mean.
→
Market for a good is in equilibrium. There is an increase in demand for this good. Explain the chain of effects of this change.
OR
By the given equilibrium in the market, explain the chain of effects of increase of demand for a good.
OR
Explain with the help of a diagram, the effects of rightward shift of the demand curve of a commodity.
→
State any three causes of a leftward shift of supply curve.
→
What will be the effect of the following changes in Total Revenue on Marginal Revenue?
  1. Total Revenue increases at a decreasing rate.
  2. Total Revenue increases at a constant rate.
→
How is the demand for a good affected by a rise in the prices of other goods? Explain.
→
What is the law of diminishing marginal product?
→