The production function described in the chapter assumes that with a fixed capital stock, increases in the labor input results in increases in output at a decreasing rate. This relationship between labor and output is known as:

Question

Quizplus · Accepted Answer

According to the description given in the question, the relationship between labor and output is decreasing at a diminishing rate, which is known as diminishing returns.

The Production Function Described in the Chapter Assumes That with a Fixed