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:

Liquid Paper

A brand of white, opaque correction fluid that is applied to paper to cover mistakes in text.

Product Life Cycle

The stages a product goes through from development and introduction to the market, through growth, maturity, and eventually decline.

Divesting Strategy

A business approach that involves selling off subsidiary business interests or investments as a way to focus on core operations or to raise capital.

Harvesting Strategy

A business strategy focused on maximizing short-term profits with limited reinvestment, often used when winding down operations or in declining markets.