Diminishing marginal product of labor occurs when adding another unit of labor
A) decreases output.
B) changes output by an amount smaller than the output added by the previous unit of labor.
C) increases output by an amount larger than the output added by the previous unit of labor.
D) decreases output by an amount smaller than the output added by the previous unit of labor.
Answer: B
You might also like to view...
Suppose the economy is initially operating at point A in the above figure. Which of the following statements is TRUE?
A) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the short run. B) An unexpected reduction in aggregate demand will cause the economy to move from point A to point C in the short run. C) An unexpected reduction in aggregate demand will cause the economy to move from point A to point B in the long run. D) none of the above
Growth in the Solow residual was fastest in the
A) 1950s. B) 1960s. C) 1970s. D) 1980s.