The slope of the per-worker production function diminishes as the amount of capital per-worker increases.This is a reflection of the law of _____.
A)increasing marginal returns
B)diminishing marginal returns
C)constant marginal returns
D)first diminishing then increasing marginal returns
E)demand

Question

Quizplus · Accepted Answer

This is due to the law of diminishing marginal returns, which states that as more and more units of a variable input (in this case, capital) are added to a fixed input (labor), the marginal product of that variable input will eventually diminish. This causes the slope of the per-worker production function to decrease as more capital is added per-worker.

The Slope of the Per-Worker Production Function Diminishes as the Amount