When a Production Function Exhibits a Diminishing, but Positive, Marginal

question 51

Multiple Choice

When a production function exhibits a diminishing, but positive, marginal product of labor,

• A)output increases, but at an increasing rate, as more workers are employed.
• B)output increases, but at a decreasing rate, as more workers are employed.
• C)output declines as more workers are employed.
• D)the effects on marginal product are ambiguous.

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Definitions:

Industrial Nation

A country with a significant portion of its economy based on manufacturing and industrial activities, often characterized by high levels of technology and infrastructure.

Labor Force Quality

A measure of the skills, education, and productivity of workers in an economy, which impacts economic output and growth.

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another, typically measured by the change in real GDP.

Military Spending

The financial allocation by a government to maintain and strengthen its armed forces, including expenditures on weaponry, infrastructure, and personnel.