What Is the Effect of Diminishing Returns to Labor on the Slope

question 34

Multiple Choice

What is the effect of diminishing returns to labor on the slope of the aggregate production function (where output is measured on the vertical axis and employment is measured on the horizontal axis) ?

• A) It implies that the slope of the curve increases as the number of workers employed increases.
• B) It implies that the slope of the curve becomes negative as the number of workers employed increases.
• C) It implies that the slope of the curve decreases (or becomes flatter)as the number of workers employed increases.
• D) It keeps the slope the same throughout.
• E) It has nothing to do with the slope of the aggregate production function.

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