Table 7.1

Assume the stock of capital is held constant.
-Table 7.1 exemplifies the principle of

Question

Table 7.1
  
Assume the stock of capital is held constant.
-Table 7.1 exemplifies the principle of

Quizplus · Accepted Answer

Table 7.1 exemplifies the principle of diminishing returns, which refers to the point at which an increase in the level of inputs no longer leads to a proportional rise in output, assuming that the stock of capital is held constant. This is evident in the table as the marginal product of labor decreases as labor input increases. The other principles listed are not directly applicable to the information presented in the table.

Table 7.1 Assume the Stock of Capital Is Held Constant