Consider an Aggregate Production Function Y = F(K,L)that Displays Diminishing

question 122

Multiple Choice

Consider an aggregate production function Y = F(K,L) that displays diminishing marginal returns to labour.If the amount of capital is held constant and the amount of labour used in production is increasing,then

• A)each additional unit of labour will add less to total output than the previous unit of labour.
• B)each additional unit of labour will add more to total output than the previous unit of labour.
• C)total output increases in proportion to the increases in labour.
• D)there are increasing returns to scale.
• E)there are constant returns to scale.

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