Question

Statement 1: In the short-run production function, there are both fixed and variable factors.

Statement 2: Law of variable proportion works in the long run in the field of production.

Options

• Both the statements are true

• Both the statements are false

• Statement 1 is true but statement 2 is false

• Statement 1 is false but statement 2 is true

Answer 1

Statement 1 is true but statement 2 is false

Explanation:

There are two elements in the short-run production function: fixed and variable. In the short run, this law of variable proportion applies, but not in the long run.