Table 5.1 -Refer to Table 5.1, Which Gives a Firm's Production Function

question 127

Multiple Choice

Table 5.1
-Refer to Table 5.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Diminishing marginal returns set in with the addition of the

• A) third worker.
• B) fourth worker.
• C) fifth worker.
• D) sixth worker.

---

Definitions:

Labor

The human effort, both physical and mental, that is used in the production process to create goods and services.

Slope

In mathematics and economics, the measure of the steepness or incline of a line, often used to describe changes in variables in relation to one another.

Isocost

A line representing all combinations of a firm's inputs that cost the same amount.

Capital

Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.