Assume That 1 Laborer Produces 6 Units of Output, 2

question 145

Multiple Choice

Assume that 1 laborer produces 6 units of output, 2 laborers produce 14 units, 3 laborers produce 20 units, and 4 laborers produce 24 units. Diminishing returns to labor set in

• A)when the firm hires the first laborer.
• B)never; diminishing returns have not set in, and total output is still increasing.
• C)when the firm hires the second laborer.
• D)when the firm hires the third laborer.
• E)when the firm hires the fourth laborer.

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