A Firm Produces Its Product Using Both Capital and Labor

question 122

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 percent. Which of the following is the most likely explanation of this finding?

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

Learn about effective time management techniques and their relevance in managerial work.

Grasp the importance of support and task orientation in leadership for achieving role clarity and high performance.

Recognize the significance of internal motivation and professional values in producing quality work.

Explore various leadership theories and models including their propositions and implications for behavior and performance.

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Definitions:

Notice

A formal announcement or warning of something, especially pertaining to legal or official matters.

Collective Bargaining Type Legislation

Laws and regulations that relate to the negotiation process between employers and a group of employees aimed at reaching agreements that regulate working conditions.

Workers' Compensation Act

Legislation designed to provide financial compensation and medical care for workers who are injured or become ill as a direct result of their job.

Employment Standards Act

Legislation that outlines minimum employment conditions such as wages, work hours, and leave entitlements to protect workers.