Question

Which of the following assumption is not applicable to the law of variable proportion?

• A. The law operates in the long run.
• B. There are two factors of production.
• C. The technology remains constant.
• D. Both (B) and (C).

Answer 1

Answer: (A)

The law operates in the long run.

The law cannot operate in the long run as it is only possible for the law of variable proportions to operate under specific conditions.

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).

These conditions are only met in the short run.