Does the production function in the table above exhibit diminishing returns? Explain
What will be an ideal response?
No, the production function does not exhibit diminishing returns. As the amount of labor hired increases, the marginal product of labor is constant. This violates the law of diminishing returns.
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For a firm to become a monopoly in an industry
A) barriers to entry must exist. B) the firm must charge higher prices than its competitors. C) the firm must produce a product with the best quality. D) the firm will engage in unfair practices to drive all competitors out of the market.
Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods200 180 140 80 0 In Exhibit 2-4, if the economy chooses production possibility D rather than production possibility B, it can expect
A. less growth in the future because it will use up its consumer goods. B. more growth in the future because of the accumulation of capital. C. the same amount of growth in the future but with a lower standard of living. D. the same amount of growth in the future but with a higher standard of living.