search
arrow-left Previous
Next arrow-right
Q: Which law states that 'as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline?
  • A. The law of unstable economy
  • B. The law of variable proportions
  • C. The law of constant proportions
  • D. The law of money savings
Correct Answer: Option B - Law of variable proportion is regarded as an important theory in economics. It is referred to as the law which states that when the quantity of one factor of production is increased when keeping all other factors constant, it will result in the decline of the marginal product of that factor. The law of variable proportions or returns to a factor plays an important role in the study of the theory of production. Hence, this law exhibits the short-run production functions in which one factor varies while the others are fixed.
B. Law of variable proportion is regarded as an important theory in economics. It is referred to as the law which states that when the quantity of one factor of production is increased when keeping all other factors constant, it will result in the decline of the marginal product of that factor. The law of variable proportions or returns to a factor plays an important role in the study of the theory of production. Hence, this law exhibits the short-run production functions in which one factor varies while the others are fixed.

Explanations:

Law of variable proportion is regarded as an important theory in economics. It is referred to as the law which states that when the quantity of one factor of production is increased when keeping all other factors constant, it will result in the decline of the marginal product of that factor. The law of variable proportions or returns to a factor plays an important role in the study of the theory of production. Hence, this law exhibits the short-run production functions in which one factor varies while the others are fixed.