Using the Cobb-Douglas production function,while holding other inputs constant,if the amount of a specific factor is increasing ________.
A)the increased amount of output from an extra unit of input declines
B)the increased amount of output from an extra unit of input increases
C)that factor's share of output is declining
D)that factor's share of output is increasing
E)none of the above

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal returns, as the amount of a specific factor increases, the marginal product of that factor eventually decreases. This means that the increased amount of output from an extra unit of input will decline, as stated in choice A.

Using the Cobb-Douglas Production Function,while Holding Other Inputs Constant,if the Amount