Question

Match List I with List II 

 

• A. A - IV, B - V, C - I, D - II, E - III
• B. A - V, B - IV, C - I, D - II, E - III
• C. A - III, B - IV, C - I, D - II, E - V
• D. A - IV, B - III, C - II, D - I, E - V

Hint:

"Explicit" means clear, direct cash transactions (out-of-pocket), whereas "Implicit" refers to hidden, self-owned costs. In the "Short run," some inputs are always fixed, while in the "Long run," everything is variable.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Microeconomic production theory distinguishes between different cost types and production timeframes to analyze business profitability.

Step 2: Detailed Explanation:
Let us match the concepts in List I with their corresponding definitions in List II:
- Explicit costs: Out-of-pocket cash expenditures paid to outsiders for purchasing inputs (e.g., seeds, fertilizers, hired labor). (A - IV)
- Implicit costs: Imputed costs of self-owned resources used in the production process, for which no direct payment is made (e.g., family labor, self-owned land). (B - V)
- Short run: A production period during which at least one input factor (such as machinery or land size) is fixed in quantity. (C - I)
- Long run: A production period long enough that all input factors can be varied. (D - II)
- Profit: The financial gain represented by the excess of total revenue over total production costs. (E - III)
Thus, the correct matching is A - IV, B - V, C - I, D - II, E - III.

Step 3: Final Answer:
This sequence matches Option (A).