Refer to Scenario 7.4 below to answer the questions that follow.
SCENARIO 7.4: A lawn service company has the following production possibilities. With one, two, three, and four workers, the company can mow 4, 9, 12, and 14 lawns per day, respectively.
-Refer to Scenario 7.4. Diminishing returns to labor set in with the ________ worker.
A) first
B) second
C) third
D) fourth

Question

Quizplus · Accepted Answer

With the third worker, there is an increase in production from 9 to 12 lawns per day, which is not as significant as the previous increase from 4 to 9 lawns per day with the addition of the second worker. This indicates that diminishing returns to labor begin to set in with the third worker. Therefore, the company's best choice is to hire three workers for maximum efficiency.