In the Short Run, Why Does a Production Function Eventually

question 234

Multiple Choice

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

• 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 labour and specialisation are used up.
• D)The opportunity cost of hiring additional workers must eventually rise.

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Definitions:

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The benefits that parties obtain from engaging in voluntary trade, allowing them to obtain goods or services they desire more than what they give up.

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An American mathematician known for his groundbreaking work in game theory, Nash Equilibrium, and his struggles with schizophrenia, depicted in the movie "A Beautiful Mind."

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The relative power or advantage one party has to influence the terms of a negotiation.

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The process of directing and controlling a group of people or an organization to achieve a set goal.