Asked by Elena Martinez on Jun 03, 2024
Verified
Which of the following best expresses the law of diminishing returns?
A) Because large-scale production allows the realization of economies of scale, the real costs of production vary directly with the level of output.
B) Population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
C) As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital) , beyond some point the resulting extra or marginal output will decline.
D) Proportionate increases in the inputs of all resources will result in a less-than-proportionate increase in total output.
Diminishing Returns
A principle indicating that as more of a variable input is added to a fixed input, the added output from each additional unit of input will eventually decrease.
Resource Labor
The work force considered as an economic resource, emphasizing the skills and abilities workers bring to the economy.
Marginal Output
The additional quantity of output that is produced by using one more unit of a particular input, holding all other inputs constant.
- Absorb the understanding of the concept along with its implications regarding diminishing marginal returns in production environments.
Verified Answer
SB
Shamara BullockJun 07, 2024
Final Answer :
C
Explanation :
The law of diminishing returns states that when increasing amounts of one factor of production (such as labor) are employed in a production process, while other factors (like capital) are kept constant, the incremental output or return from the additional input will eventually decrease. This is best reflected in option C, which describes the scenario of adding more labor to a fixed amount of capital, leading to a decrease in marginal output after a certain point.
Learning Objectives
- Absorb the understanding of the concept along with its implications regarding diminishing marginal returns in production environments.