Question

Law of variable proportion operates under certain assumptions.....

• A. state technology is given
• B. some factor inputs are fixed
• C. both a and b
• D. none

Answer 1

Answer: (C)

both a and b

When the quantity of one factor is varied, keeping the quantity of other factors constant, the proportion between the variable factor and the fixed factor is altered; the ratio of employment of the variable factor to that of the fixed factor goes on increasing as the quantity of the variable factor is increased. The law of variable proportions only applies only when the proportion of factor inputs can be changed. This in turn is only possible when all factors except the one being investigated remain fixed. It also assumes that every marginal unit is the same, and the state of technology is fixed option ‘c’ is correct answer.