Diminishing Marginal Product of Labour Occurs When Adding Another Unit

question 155

Multiple Choice

Diminishing marginal product of labour occurs when adding another unit of labour:

• A) increases output but not by as large a margin as previous units of labour
• B) decreases output
• C) increases output by more than the margin of previously employed labour
• D) none of the above are true

Know the distinction between price elastic and price inelastic demand.

Understand the conditions under which a tax might not reduce consumption of a good.

Appreciate the role of government in regulating consumption through taxation.

Understand the concept of apparent movement and its application.

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