Scenario 1: The following is a hypothetical short-run production function:

-Refer to Scenario 1.The production function illustrated in the table:
A)incurs diminishing marginal returns beyond the first unit of labor.
B)incurs diminishing marginal returns beyond the second unit of labor.
C)incurs diminishing marginal returns beyond the third unit of labor.
D)does not incur diminishing marginal returns because marginal product is positive for each unit of labor employed.

Question

Scenario 1: The following is a hypothetical short-run production function:
 
-Refer to Scenario 1.The production function illustrated in the table:
A)incurs diminishing marginal returns beyond the first unit of labor. 
B)incurs diminishing marginal returns beyond the second unit of labor. 
C)incurs diminishing marginal returns beyond the third unit of labor. 
D)does not incur diminishing marginal returns because marginal product is positive for each unit of labor employed.

Quizplus · Accepted Answer

The marginal product of labor decreases from 10 to 5 to 2, indicating diminishing marginal returns.

Scenario 1: the Following Is a Hypothetical Short-Run Production Function