MAHATMA PHULE KRISHI VIDYAPEETH, RAHURI

SEMESTER END EXAMINATION

B. Sc. (Agri.)

Semester : III (Old) Academic Year : 2020-2021

Course No. : ECON-232 Title : Production Economics and Farm Management
Credits : 2 ( 1+1 ) Total Marks : 40
Day & Date : Time :

Model Answers
SECTION ‘A’
Multiple Choice Questions and All questions are Compulsory (12 Marks).

1) Returns to Scale is ……………….production function

A. Short run C. Continues
B. Long run D. Discrete
2) Products, which are produced from the same production process are called……….
A. Complementaryi C. Joint Products
Products D. Competitive Products
B. Supplementary Products
3) …………….is used to make out a plan for the whole farm.
A. Enterprise budgeting C. Complete budgeting
B. Partial budgeting D. None of these
4) A single convenient unit in production for which output and returns are computed is
known as……………
A. Farm – Firm C. Plant
B. Technical Unit D. Economic Unit
5) -----------is an applied field of science where in the principles of choice are applied to
factors of production in the farming industry.
A. Production Economics C. Economics
B. Production Function D. Farm Management
6) The levels of recourses which do not vary irrespective of level of production are
called ___.
A. Fixed Resources C. Resources
B. Variable Resources D. Resources Services
7) ……………is science of organization and management of farm enterprise for the
purpose of securing the maximum continuous profit.
A. Farm management C. Farm budgeting
B. Farm Planning D. Simple farm planning
8) Product – Product relationship is concerned with………..
A. Resource use efficiency C. Resource allocation
B. Resource productivity D. Resource combination
9) ……. type of farming is a combination of crop enterprise with a significant
contribution from livestock rising.
A. Diversified Farming C. Mixed Farming
B. Specialized Farming D. Ranching
10) The basic production problem, ‘How to produce’ implies ---------relationship.
A. Product-Product C. Factor-Product
B. Factor-Factor D. None of these
11) Which of the following is rational and optimal zone in classical production function?
A. Zone I C. Zone III
B. Zone II D. Zone I &III
12) When TPP is maximum, MPP is………………

A. Maximum
B. equal to APP
C. Zero
D. Negative
 SECTION B
Answer in one sentence (Any Six) 12 Marks

Q.1 What is Production Possibility Curve?

The Production Possibility Curve represents all possible combinations of two products ( Y 1
Ans and Y2) that could be produced with given amounts of resources.
Q.2 What is Partial Budgeting.
Ans Partial Budgeting is a statement of anticipated changes in costs, returns and profitability for a
. minor modification.
Q.3 State the different types of farming (any four).
Ans a. Specialized farming,
. b. Diversified farming,
c. Mixed farming,
d. Dry farming,
e. Mechanized farming,
f. Marginal farming,
g. Ranching farming
Q.4 What is opportunity cost?
Ans Opportunity cost is the value of the next best alternative foregone
Q.5 Define Marginal Cost.
Ans Marginal cost is the additional cost incurred from producing an additional unit of output.
Q.6 What is Elasticity of Production?
Ans Elasticity of Production is the Percentage change in output as a result of percentage change in
. input.
Q.7 What is supplementary Enterprise?
Ans Two products are supplementary, when an increase or decrease in the output of one product
. does not affect the output of the other product.
Q.8 What is meaning of Iso-Cost line?
Ans The line which represent various combinations of two inputs that can be purchased with the
. given outlay of funds.

SECTION ‘C’
Subjective question Answer in 3-4 lines (Any four) 16 Marks

Q.1 What is uncertainty? Enlist the different types of uncertainties.

Ans Uncertainty: It is the state of mind in which one can only guess outcomes to a particular
action and is completely in the dark of the probability of an outcome. He cannot predict in
terms of probability of unknown outcomes.
Types of uncertainties:
a. Price uncertainty,
 b. Yield uncertainty,
c. Technological uncertainty and
d. Institutional uncertainty.
Q.2 What are the assumptions of linear programming problem?
Ans Assumptions:
a. Linearity of objective function ,
b. Divisibility of the activities as well as resources,
c. Additivity of the recourses and activities,
d. Finiteness of the activities and recourses restrictions,
e. Single value expectations,
f. Non-negativity of decisions variables and
g. Proportionality of activities to resources.
Q.3 State different economic principles involved in organization of farm business.
Ans. a. Principle of variable proportions ,
b. Cost principle,
c. Principles of substitution between inputs,
d. Principles of equi-marginal returns,
e. Opportunity cost principle,
f. Principles of combining enterprise ,
g. Principle of comparative advantage and.
h. Time comparison principle.
Q.4 What are the objectives of Production Economics?
Ans. a. To determine & outline the conditions which give the optimum use of resources.
b. To determine the extent to which the existing use of resources deviates from
Optimum use.
c. To analyze the forces which condition existing production pattern and resource use.
d. To explain means and methods in getting from the existing use to optimum use of
recourses.
Q.5 Define farm planning and enlist the steps involved in farm planning.
Ans Definition: It is a process to allocate scares resources of the farm to organize the farm
production in such a way that to increase resource use efficiency and income of the farmer.
Steps in farm planning
a) Preparation of farm map,
b) Recording the History of Farm,
c) Planning Bullock and Human labour requirement,
d) Planning the land use & soil conservation practices,
e) Planning livestock programme and
f) .Planning of marketing of produce.
 Q.6 State different laws of returns and write in brief on any one .
Ans. a. Law of increasing Returns (Productivity) ,
b. Law of constant returns and
c. 3.law of decreasing returns
1) Law of increasing Returns (Productivity: The addition of each successive unit of the
variable factor to the fixed factors in production process, adds more to the total output
than the previous unit i.e. each successive unit of variable factor adds more and more to
the total output.
2) Law of constant returns: The addition of each successive unit of the variable factor to
the fixed factors adds the same to the output as observed for the previous unit i.e. each
successive unit of variable factor results in an equal quantity of additional output.
3) Law of decreasing returns : The addition of each successive unit of the variable factor
to the fixed factors in production process, adds less to the total output than the previous
unit i.e. each successive unit of variable factor adds less & less to the total factor .

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