Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital.
If the capital stock is fixed at one unit,diminishing returns begin with the
A)first unit of labor.
B)second unit of labor.
C)third unit of labor.
D)fourth unit of labor.
E)fifth unit of labor.

Question

Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital.
 If the capital stock is fixed at one unit,diminishing returns begin with the
A)first unit of labor. 
B)second unit of labor. 
C)third unit of labor. 
D)fourth unit of labor. 
E)fifth unit of labor.

Quizplus · Accepted Answer

Diminishing returns occur when additional units of a variable input (in this case, labor) lead to decreasing marginal product. In this table, we see that with one unit of capital, total output increases from 0 to 20 as more units of labor are added, but then increases more slowly and eventually plateaus. This shows diminishing returns to labor beyond some point. The point at which this occurs is when adding the third unit of labor, as the increase in total output from two to three units of labor is less than the increase from one to two units of labor. Therefore, the answer is C.

Use the Following Table to Answer the Question Below: the Amount