Question

The law of variable proportion operates when the production function ___________.

• A. keeps all input factors fixed
• B. keeps all input factors variable
• C. keeps at least one factor input fixed and other variable
• D. keeps at least one factor variable and other fixed

Answer 1

Answer: (D)

keeps at least one factor variable and other fixed

The law of variable proportions operates when the production function has the following features:

1. The state of technology is given and remains unchanged

2. It is assumed that some inputs are fixed while others are varied. As it is only then that the factor proportions can be changed.

3. It is assumed that technology is such that it is possible to change the factor proportions. The law will not apply in situations where the factors of production must be used in fixed proportions.

4. It is assumed that all the units of the variable factor are homogeneous and are equally efficient. (eg every worker hired is equally efficient).