Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Production function | (I) | Its improvement raises the maximum output from every input combination |
| (B) | Cost function | (II) | The inputs that a firm uses in the production process |
| (C) | Factors of production | (III) | Maximum output that can be produced from different combinations of inputs |
| (D) | Technology | (IV) | Least cost of producing each level of output, given factor prices and technology |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A)-(III), (B)-(IV), (C)-(II), (D)-(I)
The production function and the cost function both give a best value: the most output from inputs, and the least cost of an output.
| List-I | List-II | Reason |
|---|---|---|
| (A) Production function | (III) Maximum output that can be produced from different combinations of inputs | It shows the maximum output from each combination of inputs. |
| (B) Cost function | (IV) Least cost of producing each level of output, given factor prices and technology | It shows the minimum cost of each level of output, for given input prices and technology. |
| (C) Factors of production | (II) The inputs that a firm uses in the production process | Inputs such as labour and capital, used to produce output. |
| (D) Technology | (I) Its improvement raises the maximum output from every input combination | Better technology gives more output from the same inputs, so we get a new production function. |
NCERT (2026-27), Introductory Microeconomics, Glossary: “Production function shows the maximum quantity of output that can be produced by using different combinations of the inputs.” Glossary: “Cost function – For every level of output, it shows the minimum cost for the firm.” “3.1 Production Function … The inputs that a firm uses in the production process are called factors of production. In order to produce output, a firm may require any number of different inputs. However, for the time being, here we consider a firm that produces output using only two factors of production – labour and capital. …” “3.1 Production Function … A production function is defined for a given technology. It is the technological knowledge that determines the maximum levels of output that can be produced using different combinations of inputs. If the technology improves, the maximum levels of output obtainable for different input combinations increase. We then have a new production function.” |