If you hire 1 worker, he can produce 10 pretzels a day. If you hire a 2nd worker, she can produce 8 more pretzels. If you hire a 3rd worker, she can produce 6 more pretzels a day. A graph displaying this relationship between the number of employees on the horizontal axis and total pretzel output per day on the vertical axis shows

Question

Quizplus · Accepted Answer

The graph would show an upward-sloping curve because as more workers are hired, the total pretzel output per day increases. However, the curve would become less steep as employment increases because each additional worker adds fewer and fewer pretzels to the total output. This is due to diminishing marginal returns.

If You Hire 1 Worker, He Can Produce 10 Pretzels