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Which of the following is NOT an assumption underlying the Law of Variable Proportions?
AThe state of technology is given and unchanged
BAt least one input is held fixed in quantity
CAll factors are varied in the same proportion
DOnly physical inputs and outputs are considered
Answer & Solution
Correct answer: C. All factors are varied in the same proportion
1. The law assumes given technology, at least one fixed input, factors not used in rigidly fixed proportions, and that only physical inputs/outputs matter.
2. Varying all factors in the same proportion is the condition for returns to scale, the opposite of this law.
3. So that statement is NOT an assumption of the Law of Variable Proportions.
4. The other three are genuine assumptions of the law, so they cannot be the answer.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 3 Unit I "Theory of Production", p.18_
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