A Firm Produces Its Product Using Both Capital and Labor

question 34

Multiple Choice

A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50%. Which of the following is the most likely explanation of this finding?

• A) the principle of opportunity cost
• B) the spillover principle
• C) the principle of diminishing returns
• D) the marginal principle

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Definitions:

Cam Displacement Diagram

A graphical representation showing the movement of a cam follower over time or rotation of the cam.

Displacement

The distance and direction of an object's movement from its starting point.

Cam Displacement Diagram

Cam Displacement Diagram illustrates the movement (displacement) profile of a cam follower over one complete cycle, facilitating the design and analysis of cam mechanisms.

Cam

A mechanical component that transforms rotational motion into linear motion, or vice versa, often used in engines and various machines to drive or control motion.