If increases in capital per worker lead to increased output per worker,but by decreasing amounts as capital increases,the per-worker production function _____.
A)is vertical
B)has a decreasing slope
C)has an increasing slope
D)has a negative slope
E)is horizontal

Question

Quizplus · Accepted Answer

According to the law of diminishing returns, as more and more units of a variable input (in this case, capital) are added to a fixed input (labor), the additional output produced by each additional unit of the variable input will eventually decrease. This means that the per-worker production function will have a decreasing slope, indicating that the marginal product of capital (the additional output produced by each additional unit of capital) will eventually decrease as more capital is added.

If Increases in Capital Per Worker Lead to Increased Output