Asked by Diana Stevenson on Jul 08, 2024
Verified
Refer to Figure 6.4.2 above. The situation pictured in Figure 6.4.2:
A) is one of increasing marginal returns to labor.
B) is one of increasing marginal returns to capital.
C) is consistent with diminishing marginal product.
D) contradicts the law of diminishing marginal product.
E) shows decreasing returns to scale.
Marginal Returns
The additional output produced as a result of utilizing one more unit of input, which can decrease as more units are added.
Labor
The physical and mental effort used in the production of goods and services.
Capital
Resources or assets that are used in the production of goods and services, including physical assets like machinery and buildings, and intangible assets like patents.
- Establish links among the inclination of isoquants, marginal outputs of factors, and the principle of diminishing marginal returns.
Verified Answer
BD
Bianca DreginJul 08, 2024
Final Answer :
C
Explanation :
As more workers are added, the increase in output begins to diminish, indicating diminishing marginal product.
Learning Objectives
- Establish links among the inclination of isoquants, marginal outputs of factors, and the principle of diminishing marginal returns.