Table 7.3
-Refer to Table 7.3.The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes.The capital used to produce the boxes is fixed.Diminishing returns to labour are first observed in this example after Manny hires the ________ worker.
A)second
B)third
C)fourth
D)fifth

Question

Table 7.3 
-Refer to Table 7.3.The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes.The capital used to produce the boxes is fixed.Diminishing returns to labour are first observed in this example after Manny hires the ________ worker.
A)second 
B)third 
C)fourth 
D)fifth

Quizplus · Accepted Answer

Diminishing returns to labour are observed when the output per additional worker begins to decrease. With reference to the table, as Manny hires the third worker, the marginal product of labour (MP) of the third worker is 70, while the MP of the second worker is 80. Thus, the output per additional worker is decreasing, indicating diminishing returns to labour. Therefore, the correct answer is B) third.

Table 7.3 -Refer to Table 7.3.The Table Above Refers to the Relationship