Refer to the above figure. The curve reflects
A) the law of diminishing marginal product in labor.
B) the law of diminishing marginal product in capital.
C) the law of increasing marginal product in labor.
D) the law of increasing marginal product in capital.
Answer: A) the law of diminishing marginal product in labor.
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Why do private markets fail to account for externalities?
a) The government can easily correct any adverse effect on the market that externalities may cause. b) Externalities don't occur in private markets. c) Decision makers in the market fail to take into account the external effects of their behaviour. d) Sellers include costs associated with externalities in the price of their products.
Federal subsidies to higher education have the effect of
a. increasing the demand for higher education b. increasing the supply of higher education c. decreasing the demand for higher education d. decreasing the supply of higher education