Theory of Production and CostPYQ - May 2019Question 43 of 20

Which of the following is not a characteristic of land?

Options

AIts supply for the economy is limited

BIt is immobile

CIts usefulness depends on human efforts

DIt is produced by our forefathers

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Correct Answer

✅ Option d — It is produced by our forefathers

All Options:

AIts supply for the economy is limited
BIt is immobile
CIts usefulness depends on human efforts
DIt is produced by our forefathers

Detailed Solution & Explanation

To determine which option is not a characteristic of land, let's analyze each option: • Land is a factor of production and its supply is limited, which is a fundamental concept in economics, so option A is a characteristic of land. • Land is immobile, meaning it cannot be moved from one place to another, which is another key characteristic of land, making option B correct. • The usefulness of land does depend on human efforts, such as farming or construction, which is a principle of economics, so option C is also a characteristic of land. • Option D states that land is produced by our forefathers, which is not a characteristic of land, as land is a natural resource and not a man-made product, according to the concept of land in economics. The correct answer is option D because land is a naturally occurring resource, not something that can be produced by humans, as stated by the law of scarcity and the definition of land in economics. Options A and B are incorrect because they are actual characteristics of land, as explained by economic theories.

About This Chapter: Theory of Production and Cost

Paper

Paper 4: Business Economics

Weightage

10%

Key Topics

Function, Cost Concepts (Short/Long Run)

This chapter explores how firms produce goods and services. It covers Production Functions, the Laws of Returns (Increasing, Constant, Diminishing), and all cost concepts including Total Cost, Average Cost, Marginal Cost, Fixed Cost, and Variable Cost. Understanding why the AC and MC curves are U-shaped is crucial for exam success.

View Official ICAI Syllabus

Exam Strategy Tip

The relationship between MC and AC curves is a favorite examiner topic. Remember: MC cuts AC at its minimum point. Also focus on the difference between Short Run and Long Run cost curves.

Related Comparison Tables

Fixed Cost vs Variable Cost: Cost Concepts

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