The Law of Variable Proportions states that increasing one resource while keeping others constant will lead to ___ in total output up to a certain point.

An increase

True or False: In the short run, the increase in the variable factor always leads to proportional increases in output.

False. Initially, increases in the variable factor lead to higher output, but eventually, diminishing returns set in.

The first stage of the Law of Variable Proportions is characterized by ___ and ___ of both total and marginal products.

Increasing average product; increasing marginal product

In which stage of the Law of Variable Proportions does the marginal product become negative?

Third stage

Fill in the blank: The Law of Variable Proportions assumes that technology remains ___ during the analysis.

Constant

What happens to marginal product when the number of laborers employed exceeds the optimal level?

Marginal product begins to decline and can become negative, indicating diminishing returns.

True or False: The average product is always greater than the marginal product in the first stage of the Law of Variable Proportions.

False. The average product can be less than the marginal product until they become equal at the maximum average product.

Fill in the blank: The Law of Variable Proportions is also known as the Law of ___.

Proportionality

Describe the relationship between total product, average product, and marginal product in the first stage of the Law of Variable Proportions.

In the first stage, total product increases rapidly, average product increases, and marginal product also increases until it reaches its peak.

What defines the transition from the first stage to the second stage in the context of the Law of Variable Proportions?

The transition occurs when the average product equals the marginal product, marking the peak of efficiency.

Fill in the blank: In the second stage of the Law of Variable Proportions, the total product continues to increase, but at a ___ rate.

Decreasing

Explain why a company would avoid production in the third stage of the Law of Variable Proportions.

In the third stage, additional inputs result in a negative marginal product, which would lead to losses for the company.