Match the following. List-I List-II a. Law of increasing returns 1. TP starts declining b. Law of diminishing returns 2. TP is increasing at the decreasing rate c. Law of negative returns 3. MP is increasing

The correct answer is: A. a-3, b-2, c-1

• Law of increasing returns : This is the stage of production where the total product (TP) increases at an increasing rate as more and more units of the variable input are added to a fixed amount of the fixed input. This is because the additional output that is obtained from each additional unit of the variable input is increasing.
• Law of diminishing returns : This is the stage of production where the total product (TP) increases at a decreasing rate as more and more units of the variable input are added to a fixed amount of the fixed input. This is because the additional output that is obtained from each additional unit of the variable input is decreasing.
• Law of negative returns : This is the stage of production where the total product (TP) actually starts to decline as more and more units of the variable input are added to a fixed amount of the fixed input. This is because the additional output that is obtained from each additional unit of the variable input is now negative.

In the question, List-I gives the three laws of returns, while List-II gives the three stages of production. The correct match is:

• a. Law of increasing returns : This law is associated with the stage of production where the TP is increasing at an increasing rate. This is because the additional output that is obtained from each additional unit of the variable input is increasing.
• b. Law of diminishing returns : This law is associated with the stage of production where the TP is increasing at a decreasing rate. This is because the additional output that is obtained from each additional unit of the variable input is decreasing.
• c. Law of negative returns : This law is associated with the stage of production where the TP actually starts to decline as more and more units of the variable input are added to a fixed amount of the fixed input. This is because the additional output that is obtained from each additional unit of the variable input is now negative.

Therefore, the correct answer is: A. a-3, b-2, c-1