Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | All inputs rise by 10 per cent and output rises by 10 per cent | (I) | Short run |
| (B) | All inputs are doubled and output becomes 2.4 times | (II) | Constant returns to scale |
| (C) | All inputs are doubled and output becomes 1.5 times | (III) | Decreasing returns to scale |
| (D) | Labour can be increased, but capital cannot be changed | (IV) | Increasing returns to scale |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A)-(II), (B)-(IV), (C)-(III), (D)-(I)
Compare the rise in output with the rise in all inputs. If one input cannot change, it is the short run.
| List-I | List-II | Reason |
|---|---|---|
| (A) All inputs rise by 10 per cent and output rises by 10 per cent | (II) Constant returns to scale | Output rises by the same proportion as the inputs. |
| (B) All inputs are doubled and output becomes 2.4 times | (IV) Increasing returns to scale | Output more than doubles. |
| (C) All inputs are doubled and output becomes 1.5 times | (III) Decreasing returns to scale | Output less than doubles. |
| (D) Labour can be increased, but capital cannot be changed | (I) Short run | Capital is fixed, so it is the short run. |
NCERT (2026-27): “3.6 Returns to Scale … When a proportional increase in all inputs results in an increase in output by the same proportion, the production function is said to display Constant returns to scale (CRS). When a proportional increase in all inputs results in an increase in output by a larger proportion, the production function is said to display Increasing Returns to Scale (IRS) Decreasing Returns to Scale (DRS) holds when a proportional increase in all inputs results in an increase in output by a smaller proportion. For example, suppose in a production process, all inputs get doubled. As a result, if the output gets doubled, the production function exhibits CRS. If output is less than doubled, then DRS holds, and if it is more than doubled, then IRS holds.” “3.2 The Short Run and the Long Run … In the short run, at least one of the factor – labour or capital – cannot be varied, and therefore, remains fixed. In order to vary the output level, the firm can vary only the other factor. The factor that remains fixed is called the fixed factor whereas the other factor which the firm can vary is called the variable factor.” |