When an economy faces diminishing returns
A)the slope of the per-worker production function becomes steeper as capital per hour worked increases.
B)the slope of the per-worker production function becomes flatter as capital per hour worked increases.
C)the per-worker production function shifts to the left.
D)the per-worker production function shifts to the right.

Question

Quizplus · Accepted Answer

When an economy faces diminishing returns, the marginal product of additional units of capital decreases as the amount of capital per worker increases. This means that the per-worker production function becomes flatter as the amount of capital per hour worked increases. Therefore, option B is the correct answer.

When an Economy Faces Diminishing Returns