According to the Law of diminishing marginal returns,Group of answer choicesThe production function reaches a minimum point as more output is produced.The production function is relatively steeper at the initial levels of production.The production function is relatively flatter at the initial levels of production.The production function becomes increasingly steep as more output is produced.
Question
According to the Law of diminishing marginal returns,Group of answer choicesThe production function reaches a minimum point as more output is produced.The production function is relatively steeper at the initial levels of production.The production function is relatively flatter at the initial levels of production.The production function becomes increasingly steep as more output is produced.
Solution
The Law of Diminishing Marginal Returns states that as more of one input variable is added, with all other input variables held constant, at some point the marginal increase in output produced from that additional input will start to decrease. This means that every additional unit of input will produce less output than the previous unit.
So, in response to your options:
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The production function reaches a minimum point as more output is produced. - This is not correct. The law doesn't state that output reaches a minimum, but rather that the additional output gained from each additional unit of input decreases.
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The production function is relatively steeper at the initial levels of production. - This is correct. Initially, adding more of one input (while keeping others constant) can lead to a relatively steep increase in output.
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The production function is relatively flatter at the initial levels of production. - This is not correct. The production function is steeper at the initial levels, not flatter.
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The production function becomes increasingly steep as more output is produced. - This is not correct. As per the law, the production function becomes flatter, not steeper, as more output is produced because each additional unit of input contributes less to output than the previous one.
Similar Questions
Which of the following statements best expresses the law of diminishing marginal returns?Multiple ChoiceThe same percentage increase in all inputs will result in a higher percentage increase in total output.As successive amounts of one resource (labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline.Because large-scale production allows the realization of increasing returns to scale, the costs of production vary directly with the level of output.The same percentage increase in all inputs will result in a lower percentage increase in total output.Population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
A short-run production function at some point becomes flatter due to: Group of answer choicesDecreasing returns to scale.Increasing returns to scale.The fact that a firm has to hire poorer quality workers as production increases.Diminishing marginal product.None of the above.
The second of the three ranges of production is characterized by _______ marginal returns.Question 23Select one:a.increasingb.constantc.diminishingd.negative
Which of the following explains why the law of diminishing marginal returns occurs?APer-units costs for a firm increase as the firm builds successively larger plant sizes.BSuccessive units of a good yield lesser amounts of satisfaction to consumers.CAdditional variable resources crowd fixed resources.DWhen a firm reduces price to increase sales, additional revenue to the firm is less than the price.EWhen the price of a product is reduced, total revenue falls.
The law of diminishing marginal returns means that when one uses more and more of an input:
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