In the Short Run, Why Does a Production Function Eventually

question 38

Multiple Choice

In the short run, why does a production function eventually display diminishing returns to labor?

• A)As the number of workers increases, it becomes difficult to monitor them.
• B)As a firm hires more workers, the skills and the work ethic of the additional workers will eventually decline.
• C)As the number of workers increases, eventually the gains from the division of labor and specialization are used up.
• D)The opportunity cost of hiring additional workers must eventually rise.

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Definitions:

Balance of Probabilities

The standard of evidence in civil trials, where a case is decided in favor of the party whose claim is more likely to be true.

Writ

A formal legal document issued by a court or judicial officer commanding the performance of a specific act.

Chambers Application

A legal request or motion made to a judge in their chambers, often dealing with interim or procedural matters.

Trial

A formal examination and determination of legal or factual issues by a judicial body, often including a jury, resulting in a judgment or verdict.