Figure 6.2.2 -Refer to Figure 6.2.2 Above. This Figure Shows the Impact

question 65

Multiple Choice

Figure 6.2.2
-Refer to Figure 6.2.2 above. This figure shows the impact of technological improvements and conveys the idea that:

• A) productivity increases with technology, but just as labor is subject to diminishing returns, so is technology.
• B) technology causes an increase in the output per time period, but as the production functions show, the contributions of technology are also subject to diminishing marginal returns.
• C) even though any given production process exhibits diminishing returns, labor productivity increases with technological improvements.
• D) without an increase in the productivity of labor, the contributions of technology are insufficient to avoid diminishing returns as the production function shifts upward.

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Definitions:

Total Revenue

The total income generated by the sale of goods or services by a company.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single participant has significant power to dictate the price of goods and services.

Market Price

The price at which a good or service is currently sold in the market.

Competitive Industry

An industry characterized by many sellers and buyers, where no single entity has the market power to influence prices significantly.