Use the following data to answer the question: $$\begin{array} { c c c }
\begin{array} { c }
\text { Inputs of } \
\text { Labor }\
\hline
\end{array} & & \begin{array} { c }
\text { Total } \
\text { Product }\
\hline
\end{array} \
0 & & 0 \
1 & & 8 \
2 & & 18 \
3 & & 25 \
4 & & 30 \
5 & & 33 \
6 & & 34 \
7 & & 32
\end{array}$$ Refer to the data.Diminishing returns begin to occur with the hiring of the _________ unit of labor.

Question

Use the following data to answer the question: $$\begin{array} { c c c } 
\begin{array} { c } 
\text { Inputs of } \
\text { Labor }\
\hline
\end{array} & & \begin{array} { c } 
\text { Total } \
\text { Product }\
\hline
\end{array} \
0 & & 0 \
1 & & 8 \
2 & & 18 \
3 & & 25 \
4 & & 30 \
5 & & 33 \
6 & & 34 \
7 & & 32
\end{array}$$ Refer to the data.Diminishing returns begin to occur with the hiring of the _________ unit of labor.

Quizplus · Accepted Answer

Diminishing returns begin to occur when the marginal product of labor (MPL) starts to decrease. Looking at the data, when the second unit of labor is added, MPL increases from 8 (the total product of 1 worker) to 10 (the additional product of the second worker). However, when the third unit of labor is added, MPL only increases from 18 to 25, an increase of only 7 units. This indicates diminishing returns, as the additional output produced by the third worker is less than the output produced by the second worker. Therefore, the correct answer is C, the third unit of labor.

Use the Following Data to Answer the Question Refer to the Data