The Version of the Law of Diminishing Returns That Applies

question 249

Multiple Choice

The version of the law of diminishing returns that applies to production

• A) implies that as we add more workers our output decreases.
• B) applies only in the short run.
• C) is true only when all inputs are variable.
• D) applies in the short and long run.

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Definitions:

Shift Of

An alteration in the position or direction of something, often used in economic contexts to describe changes in supply, demand, or other market variables.

Technological Change

Innovations in technology that improve the efficiency or effectiveness of production, services, and the creation of new products.

Business Expectations

Business Expectations relate to the outlook that firms have regarding future economic conditions, influencing their decisions on investments and expansions.

Investment Demand Curve

A graphical representation showing the inverse relationship between the rate of interest and the quantity of investment demanded by businesses.