According to the Production Function,as the Quantity of Labor Employed

question 327

Multiple Choice

According to the production function,as the quantity of labor employed increases,real GDP increases

• A)at an increasing rate.
• B)at a decreasing rate.
• C)at a constant rate.
• D)and then eventually decreases.
• E)until it reaches potential GDP,and then it no longer changes.

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Definitions:

Marginal Analysis

The comparison of marginal (“extra” or “additional”) benefits and marginal costs, usually for decision making.

Marginal Benefits

The uplift in utility or enjoyment gained through consuming or producing an added unit of a good or service.

Marginal Costs

The added cost incurred when one more unit of a good or service is produced.

Marginal Benefit

The additional pleasure or utility gained when one more unit of a good or service is consumed.