Practice Questions
Click any question to see detailed solutions
In the context of a production function, what does the principle of diminishing marginal returns imply?
This principle means that when you keep adding more resources, like workers or machines, the extra output you get from each new resource gets smaller....
In the context of diminishing marginal returns, which of the following scenarios demonstrates the effect on output when additional units of a single input factor are added while holding other inputs constant?
When you add more workers to the same machines, they can help each other. Other options are incorrect because This option suggests that adding workers...
In the context of production, how do diminishing marginal returns differ from returns to scale?
Diminishing marginal returns happen when adding more of one input, like workers, leads to less extra output. Other options are incorrect because This ...
What phenomenon describes the decrease in the additional output generated by adding one more unit of a variable input while keeping other inputs constant in the short run?
This concept means that if you keep adding more of one thing, like workers, the extra output you get from each new worker will start to get smaller. O...
In the context of long-run production, how does the principle of diminishing marginal returns affect economic efficiency and production scale when a firm increases its input levels?
As a firm adds more inputs, like workers or machines, the extra output from each new input can decrease after a certain point. Other options are incor...
Which of the following best describes the concept of diminishing marginal returns?
When you add more of something, like workers, to a fixed amount of space, each new worker helps less than the last. Other options are incorrect becaus...
In the context of diminishing marginal returns, what happens to the marginal product of an input as more units of that input are added, assuming all other inputs remain constant?
As you add more of one input, like workers, the extra output they create starts to go down. Other options are incorrect because Some might think that ...
In the context of diminishing marginal returns, what happens to total product when additional units of a variable input are added to a fixed input?
When you add more of a variable input, like workers, to a fixed input, like machines, total product goes up. Other options are incorrect because Some ...
As more units of a variable input are added to a fixed input, the additional output generated from each new unit will eventually experience __________.
When you add more of one thing, like workers, to something that doesn't change, like machines, each new worker helps less than the last. Other options...
If a farmer observes that adding more labor to their fixed amount of land results in smaller increases in crop yield, what is the most likely underlying cause of this phenomenon?
When a farmer adds more workers to the same land, each worker has less space and resources. Other options are incorrect because The idea here is that ...
A local bakery has been increasing the number of bakers it employs to produce more bread. Initially, the production output increases significantly with each new baker hired. However, after hiring several bakers, the owner notices that adding more bakers results in smaller and smaller increases in bread production. What concept explains this phenomenon?
This concept means that as you add more workers, each new worker contributes less to production. Other options are incorrect because This idea is abou...
Diminishing Marginal Returns : Increasing Labor :: Increasing Capital : ?
When you keep adding more capital, like machines, there comes a point where each new machine helps less than the last one. Other options are incorrect...
How does the principle of diminishing marginal returns influence a firm's decision on labor employment?
This principle means that after hiring a certain number of workers, each new worker adds less to total output. Other options are incorrect because Thi...
Which of the following scenarios best illustrates the principle of diminishing marginal returns in production?
When a farmer adds more workers to a fixed piece of land, each worker helps less than the one before. Other options are incorrect because This option ...
Arrange the steps in understanding diminishing marginal returns in a production context.
You start by increasing the variable input, like workers or materials. Other options are incorrect because This option suggests finding the point of d...
Which of the following statements accurately reflect the implications of diminishing marginal returns in production? Select all that apply.
Other options are incorrect because This statement suggests that adding more workers will always help; This option implies that efficiency can keep in...
What is the primary implication of diminishing marginal returns in production?
When you add more of something, like workers, each new worker helps less than the one before. Other options are incorrect because Some people think th...
Master Diminishing Marginal Returns
Ready to take your understanding to the next level? Access personalized practice sessions, progress tracking, and advanced learning tools.