The law of diminishing returns, as it applies to labor, means that
A. the average product of labor increases at a decreasing rate.
B. the total output eventually decreases.
C. the marginal product of labor will eventually be a horizontal line at zero.
D. the marginal product of labor eventually declines.
E. the average product of labor starts to decline before the marginal product of labor.
Answer: D
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The yield on a thirty-year Treasury bond is 8% at the same time as the yield on two-year Treasury note is 5%. This occurrence
A) indicates that the yield curve is downward sloping. B) is well explained by the segmented markets theory. C) is largely explained by the favorable tax treatment of Treasury notes. D) indicates that the bond market is anticipating that inflation will fall.
Specifically targeted tax credits are simple and can save administrative costs
Indicate whether the statement is true or false
If demand is perfectly inelastic, then the demand curve will be vertical
a. True b. False Indicate whether the statement is true or false
Under perfect competition, the market mechanism, without any government regulation, is capable of
a. allocating resources efficiently. b. solving equity problems. c. making the average cost of labor equal to the average cost of all commodities. d. making more income available to the poor.