The Law of Diminishing Returns States That as

question 461

Multiple Choice

The law of diminishing returns states that as

• A) the size of a plant increases, the firm's fixed cost decreases.
• B) the size of a plant increases, the firm's fixed cost increases.
• C) a firm uses more of a variable input, given the quantity of fixed inputs, the marginal product of the variable input eventually diminishes.
• D) a firm uses more of a variable input, given the quantity of fixed inputs, the firm's average total cost will decrease eventually.

---

Definitions:

Immigration Effect

The impact that immigration has on a host country's economy, labor market, culture, and social fabric, both positive and negative.

Market Labor

The supply of available workers in relation to employment opportunities within a given market or industry.

Equilibrium Wage

The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by employees, leading to a stable employment situation.

Freight Hauling

The process of transporting goods and materials by land, sea, or air.