The Curvature of the Production Function Shows That as Employment

question 212

Multiple Choice

The curvature of the production function shows that as employment increases, the productivity of labor

• A) decreases and becomes negative.
• B) remains positive and increases.
• C) remains positive but decreases.
• D) remains constant.

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Definitions:

Production Possibilities Curve

A graphical representation showing the maximum quantity of two goods or services that can be produced within a given time period and with available resources.

Efficiently

The ability to achieve a desired result or produce a desired output with the least amount of waste, effort, or inefficiency.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, assuming all resources are fully and efficiently utilized.