Use the data in the table below to answer questions 1 through 10.Input Total product0 01 42 83 154 225 256 277 288 24What range of inputs leads to decreasing marginal returns?A.5 and aboveB.Between 3 and 4C.Up to 4D.8 and aboveE.Up to 2
Question
Use the data in the table below to answer questions 1 through 10.Input Total product0 01 42 83 154 225 256 277 288 24What range of inputs leads to decreasing marginal returns?A.5 and aboveB.Between 3 and 4C.Up to 4D.8 and aboveE.Up to 2
Solution
To answer this question, we first need to understand what marginal returns are. Marginal returns refer to the additional output resulting from a one unit increase in the input.
Let's calculate the marginal product for each unit increase in input:
- From 0 to 1 input, the total product increases from 0 to 4. So, the marginal product is 4.
- From 1 to 2 inputs, the total product increases from 4 to 8. So, the marginal product is 4.
- From 2 to 3 inputs, the total product increases from 8 to 15. So, the marginal product is 7.
- From 3 to 4 inputs, the total product increases from 15 to 22. So, the marginal product is 7.
- From 4 to 5 inputs, the total product increases from 22 to 25. So, the marginal product is 3.
- From 5 to 6 inputs, the total product increases from 25 to 27. So, the marginal product is 2.
- From 6 to 7 inputs, the total product increases from 27 to 28. So, the marginal product is 1.
- From 7 to 8 inputs, the total product decreases from 28 to 24. So, the marginal product is -4.
From the above calculations, we can see that the marginal product starts to decrease from 5 inputs and continues to decrease thereafter. Therefore, the range of inputs that leads to decreasing marginal returns is 5 and above. So, the answer is A. 5 and above.
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