Asked by Osama Al-bahnasi on Apr 24, 2024
Verified
Use the following data to answer the question: Inputs of Labor Total Product 0018218325430533634732\begin{array} { c c c } \begin{array} { c } \text { Inputs of } \\\text { Labor }\\\hline\end{array} & & \begin{array} { c } \text { Total } \\\text { Product }\\\hline\end{array} \\0 & & 0 \\1 & & 8 \\2 & & 18 \\3 & & 25 \\4 & & 30 \\5 & & 33 \\6 & & 34 \\7 & & 32\end{array} Inputs of Labor 01234567 Total Product 08182530333432 Refer to the data.Diminishing returns begin to occur with the hiring of the _________ unit of labor.
A) first
B) second
C) third
D) seventh
Diminishing Returns
A principle stating that as additional amounts of a variable input are added to a fixed input, beyond some point the marginal product of the variable input begins to decrease.
Unit of Labor
A measure of labor input, often represented by one worker or one hour of work, used to calculate productivity or costs.
- Acquire knowledge about the law of diminishing returns and its repercussions on production and costs.
Verified Answer
KH
Kenzie HagoodMay 02, 2024
Final Answer :
C
Explanation :
Diminishing returns begin to occur when the marginal product of labor (MPL) starts to decrease. Looking at the data, when the second unit of labor is added, MPL increases from 8 (the total product of 1 worker) to 10 (the additional product of the second worker). However, when the third unit of labor is added, MPL only increases from 18 to 25, an increase of only 7 units. This indicates diminishing returns, as the additional output produced by the third worker is less than the output produced by the second worker. Therefore, the correct answer is C, the third unit of labor.
Learning Objectives
- Acquire knowledge about the law of diminishing returns and its repercussions on production and costs.