The following table shows the total output produced in a factory at various levels of employment of labor. The firm sells each unit of output at $2 and each worker is paid a wage of $32.
Table 5-1
$\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Number of } \
\text { workers }
\end{array} & \text { Total output } \
\hline 1 & 8 \
\hline 2 & 18 \
\hline 3 & 30 \
\hline 4 & 41 \
\hline 5 & 50 \
\hline 6 & 56 \
\hline 7 & 60 \
\hline 8 & 61 \
\hline 9 & 62 \
\hline
\end{array}$
-Refer to Table 5-1. Diminishing returns to labor occurs beyond:
A) 4 workers.
B) 3 workers.
C) 5 workers.
D) 9 workers.
E) 8 workers.

Question

The following table shows the total output produced in a factory at various levels of employment of labor. The firm sells each unit of output at $2 and each worker is paid a wage of $32.
Table 5-1
 $\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { workers }
\end{array} & \text { Total output } \
\hline 1 & 8 \
\hline 2 & 18 \
\hline 3 & 30 \
\hline 4 & 41 \
\hline 5 & 50 \
\hline 6 & 56 \
\hline 7 & 60 \
\hline 8 & 61 \
\hline 9 & 62 \
\hline
\end{array}$
-Refer to Table 5-1. Diminishing returns to labor occurs beyond:
A) 4 workers.
B) 3 workers.
C) 5 workers.
D) 9 workers.
E) 8 workers.

Quizplus · Accepted Answer

Diminishing returns to labor occur when each additional worker contributes less to total output than the previous one. This starts after the 3rd worker, as the marginal output decreases from 12 (from 2 to 3 workers) to 11 (from 3 to 4 workers).

The Following Table Shows the Total Output Produced in a Factory