Multiple Choice QuestionThe decreasing marginal product from the addition of one additional unit of labor is due to which of the following?Multiple choice question.The law of diminishing marginal utilityThe law of diminishing returnsThe law of supplyThe law of demand
Question
Multiple Choice QuestionThe decreasing marginal product from the addition of one additional unit of labor is due to which of the following?Multiple choice question.The law of diminishing marginal utilityThe law of diminishing returnsThe law of supplyThe law of demand
Solution
The correct answer is "The law of diminishing returns". This law states that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output. In this case, the input is labor. When you continue to add more labor, but keep all other factors the same (like machinery, space, etc.), each additional unit of labor will contribute less and less to the overall output.
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Multiple Choice QuestionWhat is the marginal product?Multiple choice question.The ability of one product to be acceptably substituted for another productThe price at which a product will no longer be profitableThe demand for a product that comes from demand for items for which it usedThe additional output from using one more unit of labor
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Multiple Choice QuestionWhich of the following describes why marginal revenue is less than price for monopolists?Multiple choice question.Because marginal revenue is greater than marginal cost which is less than priceBecause total revenue is greater than priceBecause the lower price of the extra unit of output also applies to all prior units of outputBecause the lower price of the extra unit of output only applies to subsequent units of output
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