Business StudiesNature and significance of Management

Choose the incorrect statement from the following:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → If for the same benefits, fewer resources are used but more costs are incurred then efficiency increases.

Option (1) Efficiency involves cost-benefit analysis. — A correct statement (Incorrect). Efficiency weighs the cost of the inputs against the benefit of the outputs.
Option (2) If by using less resources, more benefits are derived, then efficiency increases. — A correct statement (Incorrect). Less input and more output is the clearest gain in efficiency.
Option (3) If for the same benefit or outputs, fewer resources are used, then efficiency increases. — A correct statement (Incorrect). The output is the same, and it is got with less input.
Option (4) If for the same benefits, fewer resources are used but more costs are incurred then efficiency increases. — An incorrect statement (Correct). Efficiency rises when fewer resources are used and less cost is incurred. If the cost goes up for the same benefit, efficiency falls. The book says “less costs”; the option says “more costs”.

NCERT (2026-27 Edition): “Concept … Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs. If by using less resources (i.e., the inputs) more benefits are derived (i.e., the outputs) then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred. …”

Choose the incorrect statement from the following:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → If for the same benefits, fewer resources are used but more costs are incurred then efficiency increases.

Option (1) Efficiency involves cost-benefit analysis. — A correct statement (Incorrect). Efficiency weighs the cost of the inputs against the benefit of the outputs.
Option (2) If by using less resources, more benefits are derived, then efficiency increases. — A correct statement (Incorrect). Less input and more output is the clearest gain in efficiency.
Option (3) If for the same benefit or outputs, fewer resources are used, then efficiency increases. — A correct statement (Incorrect). The output is the same, and it is got with less input.
Option (4) If for the same benefits, fewer resources are used but more costs are incurred then efficiency increases. — An incorrect statement (Correct). Efficiency rises when fewer resources are used and less cost is incurred. If the cost goes up for the same benefit, efficiency falls. The book says “less costs”; the option says “more costs”.