When Does Productivity Increase

question 12

Multiple Choice

When does productivity increase?

• A) inputs increase while outputs remain the same
• B) inputs decrease while outputs remain the same
• C) outputs decrease while inputs remain the same
• D) inputs and outputs increase proportionally
• E) none of the above

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Definitions:

Marginal Product

The extra production achieved by the utilization of an additional unit of a specific input while keeping all other inputs unchanged.

Demand Curve

An illustration depicting how variations in the price of a good or service affect its demand within a certain timeframe.

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and the free entry and exit of firms, leading to price takers.

Marginal Product

The additional output generated by employing one more unit of a certain input, such as labor or capital.