The law of diminishing marginal returns in a manufacturing plant of a fixed capacity implies that, eventually, employing
A. one less worker will decrease the average product per worker.
B. one less worker will not affect the average product per worker.
C. one more worker will increase the average product per worker.
D. one more worker will decrease the average product per worker.
Answer: D
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GDP does not count:
A. the estimated value of homemaker production. B. state and local government purchases. C. spending for new homes. D. changes in inventories.
Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites smoke less and chew gum more. Tobacco companies lay off workers, while chewing gum manufacturers employ more workers. This is an example of
a. structural unemployment created by efficiency wages.
b. structural unemployment created by sectoral shifts.
c. frictional unemployment created by efficiency wages.
d. frictional unemployment created by sectoral shifts.