The Production Function Shows That as Employment Increases,real GDP

question 11

Multiple Choice

The production function shows that as employment increases,real GDP

• A)increases at an increasing rate.
• B)increases at a decreasing rate.
• C)increases at a constant rate.
• D)decreases at a decreasing rate.
• E)increases until it reaches potential GDP and then it starts to decrease.

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Definitions:

Units

Basic quantities or measures adopted to quantify and represent variables in quantitative analyses, such as units of measurement in physics or economic units in economics.

Profit-Maximizing

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Loss-Minimizing

A strategy aimed at reducing the negative impact or minimizing the losses in a business operation or an investment.

Quantity

The amount or number of a material or immaterial good or service.