According to the per-worker production function, how will the output per worker be affected as the amount of capital per worker increases?
A) It will increase at an increasing rate.
B) It will first increase and then decrease.
C) It will decrease, but at an increasing rate.
D) It will increase, but at a decreasing rate.

Question

According to the per-worker production function, how will the output per worker be affected as the amount of capital per worker increases?  
A) It will increase at an increasing rate. 
B) It will first increase and then decrease. 
C) It will decrease, but at an increasing rate. 
D) It will increase, but at a decreasing rate.

Quizplus · Accepted Answer

According to the law of diminishing marginal returns, as the amount of capital per worker increases, the output per worker will increase, but at a decreasing rate. This means that initially, the increase in capital per worker will lead to a significant increase in output per worker, but eventually, the increase in output will start slowing down, and at some point, adding more capital per worker will actually lead to a smaller increase (or even a decrease) in output per worker. Therefore, the correct option is D.

According to the Per-Worker Production Function, How Will the Output