Which of the following is not included in laws of production ?

Question

Accepted Answer

The correct option is 4:
Least cost combination of factors is a concept related to the theory of cost and the firm's equilibrium, specifically addressing how a producer minimizes the total cost of production for a given level of output using isocost and isoquant analysis. This concept falls under the "Theory of Cost" or "Producer's Equilibrium," which deals with optimizing input mix to achieve efficiency. It is a prescriptive rule for economic behavior, not a fundamental "law of production" which describes the technical relationship between inputs and output.

The incorrect option is 1:
The Law of diminishing returns to a factor, often used interchangeably with the Law of Variable Proportions, is a fundamental law of production that operates in the short run. It states that as more units of a variable factor are added to a fixed factor, the marginal product of the variable factor will eventually decline. This describes a technical, physical reality of the production function when some inputs are fixed.

The incorrect option is 2:
The Law of variable proportions is another term for the short-run Law of Diminishing Marginal Returns. It explicitly examines the relationship between input and output when the proportion of factors of production (e.g., labor to capital) is varied, assuming at least one factor remains fixed. It divides production into three stages based on the marginal and average product behavior.

The incorrect option is 3:
Returns to scale is a primary law of production that operates in the long run, where all factors of production are variable. It examines the change in output (scale) when all inputs are increased proportionally. The three possibilities are increasing, constant, or decreasing returns to scale, all of which describe the fundamental technical relationship between inputs and output in the long run.