What does the law of diminishing marginal returns state?
A) When all inputs to production are increased in equal proportions, output will eventually decrease.
B) When one input is increased, with all other inputs unchanged, the marginal product of the input will eventually decline.
C) When one input is held constant, and all other inputs are increased, output will eventually decrease.
D) When one input is increased, and all other inputs are held constant, output will increase at an increasing rate.
E) When all inputs to production are increased in equal proportions, the addition to output will increase at an increasing rate.
Correct Answer:
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Q1: The following table shows the total
Q2: Firm X sells output at a price
Q4: A firm's production function shows:
A) the maximum
Q5: The following table shows the total
Q6: The marginal product of labor initially rises
Q7: The following table shows the total
Q8: Which of the following is true in
Q9: When a firm faces constant returns to
Q10: The short-run is best defined as the
Q11: A profit-maximizing firm will hire the variable
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