Exhibit 8.2

-Refer to Exhibit 8.2, which 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

Exhibit 8.2
 
-Refer to Exhibit 8.2, which 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.

Quizplus · Accepted Answer

The diminishing slopes of the curves reflect diminishing marginal returns from capital, which means that as more capital is added, each additional unit of capital will yield progressively smaller increases in output.

Exhibit 8.2 -Refer to Exhibit 8.2, Which Shows Three Different Per-Worker Production