The table below shows various values of labour (L),capital (K),and technology (T)for Economies A,B,and C.In each case,the aggregate production function takes the following form:
Y = T × TABLE 25-4
-Refer to Table 25-4.Diminishing marginal returns to labour is most evident in the data shown for

Question

The table below shows various values of labour (L),capital (K),and technology (T)for Economies A,B,and C.In each case,the aggregate production function takes the following form:
Y = T ×   TABLE 25-4
-Refer to Table 25-4.Diminishing marginal returns to labour is most evident in the data shown for

Quizplus · Accepted Answer

In Economy A, as the quantity of labor increases from 1 to 2, output increases by a larger amount (from 10 to 22) than when the quantity of labor increases from 4 to 5 (from 46 to 54). This indicates diminishing marginal returns to labor. However, in Economies B and C, output increases by a relatively constant amount as the quantity of labor increases, indicating constant returns to labor. Therefore, the correct answer is A.

The Table Below Shows Various Values of Labour (L),capital (K),and