Table 2.4 -The Principle of Diminishing Returns Does NOT Apply to Labor

question 53

Multiple Choice

Table 2.4
-The principle of diminishing returns does NOT apply to labor when all inputs are allowed to vary because

• A) a firm can build an additional production facility so each worker's share of the facility doesn't necessarily decrease.
• B) eventually the marginal product of labor will begin to increase again.
• C) a firm can fire inefficient workers.
• D) None of the above. Diminishing returns always apply.

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Definitions:

Tripled

To increase threefold or become three times as large in amount or number.

Farm Program

Government policies designed to support farmers by stabilizing prices, ensuring food supply, or providing direct subsidies for crop insurance, conservation, and agricultural research.

Price Ceilings

Government-imposed limits on how high a price can be charged for a good or service, intended to protect consumers.

Agricultural Research

The systematic pursuit to increase understanding and improve techniques in farming, including crop production, livestock care, soil management, and pest control.