Diminishing returns to physical capital means that, when the amount of human capital per worker and the state of technology are held fixed, each increase in the amount of physical capital per worker leads to:

Question

Quizplus · Accepted Answer

According to the law of diminishing returns, after a certain point, the marginal product of an additional unit of input (in this case, physical capital) will decrease. Therefore, each increase in the amount of physical capital per worker will lead to a smaller increase in the marginal product of labor.

Diminishing Returns to Physical Capital Means That, When the Amount