A Firm Produces Its Product Using Both Capital and Labor

question 122

Multiple Choice

A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?

• A) the principle of opportunity cost
• B) the principle of diminishing returns
• C) the marginal principle
• D) the spillover principle

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Definitions:

Infant Development

The significant physical, cognitive, and emotional changes that occur from birth to the end of infancy (around age 2).

Fetus's Health

The physical well-being and development status of an unborn baby during pregnancy.

Reaction Range

A concept in genetics and psychology, referring to the limits within which a person’s intelligence or other traits can be shaped by the environment.

Canalization

A concept in developmental biology and psychology referring to the tendency of an organism to develop in a predetermined way, despite variations in environment or genetics.