Which of the following statements about a production function is NOT correct?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → For given amounts of L and K, it can give more than one level of maximum output.
A production function gives the maximum output for each input combination, and a maximum can have only one value. So for any L and K there is only one q.
Option (1) For given amounts of L and K, it can give more than one level of maximum output. — False. For any L and any K, there is only one maximum output.
Option (2) For various quantities of inputs used, it gives the maximum quantity of output that can be produced. — True. This is how the production function is defined.
Option (3) In the example q = K × L, if either K or L increases, q also increases. — True. In q = K × L, a larger K or L gives a larger product.
Option (4) It deals only with the efficient use of inputs. — True. Taking the maximum output means no input is wasted.
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.” “3.1 Production Function The production function of a firm is a relationship between inputs used and output produced by the firm. For various quantities of inputs used, it gives the maximum quantity of output that can be produced.” |