Exhibit 8-1

-The bowed shape of the per-worker production function in Exhibit 8-1 illustrates the law of diminishing marginal returns from capital.

Question

Exhibit 8-1
 
-The bowed shape of the per-worker production function in Exhibit 8-1 illustrates the law of diminishing marginal returns from capital.

Quizplus · Accepted Answer

The statement is true. The bowed shape of the per-worker production function represents the diminishing marginal returns from capital, as the extra output gained from each additional unit of capital decreases as the amount of capital increases.

Exhibit 8-1 -The Bowed Shape of the Per-Worker Production Function in Exhibit