The figure below shows three different per-worker production functions: PF₁, PF₂, and PF₃. The diminishing slopes of the curves reflect _____. A) increasing returns to scale B) increasing marginal returns from capital C) diminishing marginal returns from capital D) decreasing returns to scale E) diminishing marginal returns from labor

Question

Quizplus · Accepted Answer

The diminishing slopes of the curves reflect diminishing marginal returns from capital, as the additional output per unit of capital decreases as more capital is added.

The Figure Below Shows Three Different Per-Worker Production Functions: PF1

The Figure Below Shows Three Different Per-Worker Production Functions: PF₁