Assume a Production Function with Only Two Inputs, Capital and Labor.In

question 48

Multiple Choice

Assume a production function with only two inputs, capital and labor.In this case, the concept of a diminishing marginal product of capital implies that

• A)as less capital is being used, more and more labor has to be employed to increase output
• B)as both labor and capital inputs are increased, output increases but at a decreasing rate
• C)as the amount of capital is increased and the amount of labor remains fixed, output increases but at a decreasing rate
• D)as the amount of capital increases and the amount of labor remains fixed, output cannot increase
• E)labor inputs have a bigger impact on increasing output than capital inputs