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Assume a Production Function with Only Two Inputs, Capital and Labor.In

Question 18

Multiple Choice

Assume a production function with only two inputs, capital and labor.In this case, the concept of a diminishing marginal product of capital implies that


A) as less capital is being used, more and more labor has to be employed to increase output
B) as both labor and capital inputs are increased, output increases but at a decreasing rate
C) as the amount of capital is increased and the amount of labor remains fixed, output increases but at a decreasing rate
D) as the amount of capital increases and the amount of labor remains fixed, output cannot increase
E) labor inputs have a bigger impact on increasing output than capital inputs

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