Assume a Toy Company Hires an Additional Worker to Assemble

question 54

Multiple Choice

Assume a toy company hires an additional worker to assemble toys,and the size of the factory and amount of equipment remain constant.As a result,the level of output increases but by a smaller amount than when the previous additional worker was hired.This is an example of:

• A) The law of poor planning.
• B) The law of diminishing returns.
• C) Say's Law.
• D) The law of substitution.

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Definitions:

Full Employment

Refers to a situation in the economy where all available labor resources are being used in the most efficient way possible.

Unemployment Rate

The proportion of the overall workforce that is not employed but is actively looking for work and ready to take on a job.

Economic Growth

An increase in a country's capacity to produce goods and services, reflected over time in a rise in the national income and standard of living.

Production Possibilities Curve

A graphical representation showing the maximum quantity of goods and services that can be produced within an economy given available resources and technology.