The Fact That the Production Function Relating Output to Labour

question 77

Multiple Choice

The fact that the production function relating output to labour becomes flatter as we move from left to right means that

• A)the marginal product of labour is positive.
• B)the marginal product of capital is positive.
• C)there is diminishing marginal productivity of labour.
• D)there is diminishing marginal productivity of capital.

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Definitions:

Marginal Cost

The elevation in total spending caused by the assembly of one additional unit of a product or service.

Average Cost

It refers to the total cost divided by the number of goods or services produced.

Monopolist

A sole provider of a good or service in a market, facing no direct competition, which often results in the power to set prices.

Marginal Cost

The cost associated with producing an additional unit of a product, emphasizing its importance in economic decision-making.