The per-worker production function illustrates the fact that as the amount of capital per worker increases,output per worker:
A)increases at an increasing rate.
B)increases then decreases.
C)decreases but at an increasing rate.
D)decreases.
E)increases but at a decreasing rate.

Question

The per-worker production function illustrates the fact that as the amount of capital per worker increases,output per worker:​
A)increases at an increasing rate.
B)increases then decreases.
C)decreases but at an increasing rate.
D)decreases.
E)increases but at a decreasing rate.

Quizplus · Accepted Answer

The per-worker production function shows that as the amount of capital per worker increases, output per worker increases but at a decreasing rate. This is due to the diminishing marginal product of capital, meaning that as more capital is added to a fixed amount of labor, each unit of additional capital will result in a smaller increase in output. Therefore, the curve will continue to move upward but at a flatter slope, showing that the increase in output per worker is becoming less and less as more capital is added.

The Per-Worker Production Function Illustrates the Fact That as the Amount