The fact that the production function relating output to labor becomes flatter as we move from left to right means that
A)the marginal product of labor is positive.
B)the marginal product of capital is positive.
C)there is diminishing marginal productivity of labor.
D)there is diminishing marginal productivity of capital.

Question

Quizplus · Accepted Answer

The flatter production function indicates a decreasing marginal product of labor, which means that each additional unit of labor added results in a smaller increase in output. This is referred to as the law of diminishing marginal productivity of labor. Therefore, choice C is correct. Choices A and B are not correct because the question does not provide any information about the marginal product of labor or capital. Choice D is also incorrect because the question is specifically referring to the production function in relation to labor, not capital.

The Fact That the Production Function Relating Output to Labor