What is the effect of diminishing returns to labor on the slope of the aggregate production function (where output is measured on the vertical axis and employment is measured on the horizontal axis)?
a. It implies that the slope of the curve increases as the number of workers employed increases.
b. It implies that the slope of the curve becomes negative as the number of workers employed increases.
c. It implies that the slope of the curve decreases (or becomes flatter) as the number of workers employed increases.
d. It keeps the slope the same throughout.
e. It has nothing to do with the slope of the aggregate production function.
C
You might also like to view...
Which of the following is NOT considered one of the factors of production?
A) land B) labor C) capital D) technology E) entrepreneurship
At a low wage rate,
a. there is no substitution effect b. there is no income effect c. the substitution effect usually outweighs the income effect d. the income effect usually outweighs the substitution effect e. the disutility of market work is usually high