Read the two statements and choose the correct option.
I. The law of variable proportions applies in the short run.
II. Returns to scale apply in the long run.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

Variable proportions: one input varies while another is fixed, so it is a short-run law. I is true.
Returns to scale: all inputs vary together, which is possible only in the long run. II is true.

Ten questions from Production Function: TP, MP and AP, at your own pace.

Ten questions from Production Function: TP, MP and AP, at your own pace.

Read the two statements and choose the correct option.I. The law of variable proportions applies in the short run.II. Returns to scale apply in the long run.