Consider the following statements:
(A) A production function deals only with the efficient use of inputs.
(B) Efficiency means that more output can still be obtained from the same inputs.
(C) In a production function, for any L and any K there is only one q.
(D) An isoquant is an alternative way of representing the production function.
(E) The production function shows the least cost of producing each level of output.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C) and (D) only
(A) A production function deals only with the efficient use of inputs. — Correct. It takes the maximum output for any inputs, so only efficient use counts.
(B) Efficiency means that more output can still be obtained from the same inputs. — Incorrect. Efficiency means no more output can be obtained from the same inputs.
(C) In a production function, for any L and any K there is only one q. — Correct. Each pair of L and K gives a single maximum output.
(D) An isoquant is an alternative way of representing the production function. — Correct. An isoquant shows the same production function as a set of curves.
(E) The production function shows the least cost of producing each level of output. — Incorrect. The least cost of each output is given by the cost function. The production function links inputs to output.
NCERT (2026-27): “3.1 Production Function … Describing a production function in this manner tells us the exact relation between inputs and output. If either K or L increase, q will also increase. For any L and any K, there will be only one q. Since by definition we are taking the maximum output for any level of inputs, a production function deals only with the efficient use of inputs. Efficiency implies that it is not possible to get any more output from the same level of inputs.” “Isoquant In Chapter 2, we have learnt about indifference curves. Here, we introduce a similar concept known as isoquant. It is just an alternative way of representing the production function. …” “3.7 Costs In order to produce output, the firm needs to employ inputs. But a given level of output, typically, can be produced in many ways. There can be more than one input combinations with which a firm can produce a desired level of output. In Table 3.1, we can see that 50 units of output can be produced by three different input combinations (L = 6, K = 3), (L = 4, K = 4) and (L = 3, K = 6). The question is which input combination will the firm choose? With the input prices given, it will choose that combination of inputs which is least expensive. So, for every level of output, the firm chooses the least cost input combination. Thus the cost function describes the least cost of producing each level of output given prices of factors of production and technology.” |