If a Firm Is Experiencing Diminishing Marginal Returns to Labor

question 15

Multiple Choice

If a firm is experiencing diminishing marginal returns to labor, which of the following must be true?

• A)The first workers the firm hired were better than the workers hired later on.
• B)The firm is experiencing decreasing returns to scale.
• C)The positive effect of specialization in production is being offset by the negative effect of crowding of inputs.
• D)Output is decreasing.
• E)The firm should buy more nonlabor inputs.

---

Definitions:

Convergence Theory

The hypothesis that as societies develop, they begin to converge, or become more similar, in terms of social, economic, and technological aspects.

Power of Groups

Refers to the ability of groups to exert influence or control over their members and others, shaping behavior, norms, and decision-making processes.

Social Movements

Collective efforts by groups of people to challenge existing norms or laws and advocate for significant social, political, or environmental changes.

Convergence Theory

A theory in sociology that suggests societies globally are becoming more similar in terms of culture, technological advancements, and economic practices due to increased connectivity.