Variable proportions type production function exists ........

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Variable proportions type production function exists:

When with change in the level of output there is change in factor ratio

When it is possible to increase output by increasing the application of the variable factor

When scale of production changes with change in the level of output

Both (a) and (b)

Explanation:

- Option 1: When with change in the level of output there is change in factor ratio

- In a variable proportions production function, the factor ratio indeed changes as the level of output changes. This means the proportion in which inputs are used varies based on the output required.

- Option 2: When it is possible to increase output by increasing the application of the variable factor

- This statement is also true for a variable proportions production function. It allows for increasing one input while keeping others constant to achieve higher output.

- Option 3: When scale of production changes with change in the level of output

- This describes changing returns to scale rather than a variable proportion production function.

- Option 4: Both (a) and (b)

- This is correct because both Option 1 and Option 2 accurately define a variable proportions production function.

Correct Answer: Option 4 - Both (a) and (b)