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SS2: ECONOMICS - 1ST TERM

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  1. Basic Tools for Economic Analysis I | Week 1
    5 Topics
  2. Basic Tools for Economic Analysis II | Week 2
    3 Topics
    |
    1 Quiz
  3. Theory of Demand | Week 3
    4 Topics
    |
    1 Quiz
  4. Theory of Supply | Week 4
    4 Topics
    |
    1 Quiz
  5. Theory of Production Possibility Curve I | Week 5
    1 Topic
  6. Theory of Production Possibility Curve II | Week 6
    4 Topics
    |
    1 Quiz
  7. Theory of Cost I | Week 7
    2 Topics
  8. Theory of Cost II | Week 8
    3 Topics
    |
    1 Quiz
  9. Revenue Concept | Week 9
    2 Topics
    |
    1 Quiz

Quizzes




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Topic Content:

  • The Law of Variable Proportion or Law Of Diminishing Returns
    • Increasing returns to scale
    • Constant returns to scale
    • Decreasing returns to scale

What is the Law of Variable Proportion in Economics?

Law of Variable Proportion is regarded as an important theory in Economics. It is referred to as the law which states that when the quantity of one factor of production is increased while keeping all other factors constant, it will result in the decline of the marginal product of that factor.

 

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Evaluation Questions:

1. Enumerate the relationship between the PPC and opportunity cost.

Answer:

1. The download slope of the PPC indicates the principle of opportunity.

2. PPC slopes downward, negatively, or from left to the right

3. PPC involves sacrificing the production of one commodity for the production of more of another commodity.

4. PPC and opportunity cost solve economic problems by maximizing the satisfaction of human wants with limited available resources

2. Discuss the three stages of production returns. 

Answer:

1. Decreasing return to scale: It explains where an increase in the input of all factors leads to a less than proportionate increase in output level.

2. Constant return to scale: It explains where a proportionate change in input produces a proportionate change in the level of output.

3. Increasing return to scale: It explains where an increase in inputs of all factors which leads to more than a proportionate increase in output.

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