Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
As more of a variable input is added to a fixed input, the additional output produced will eventually decrease.
B
Increasing the number of fixed inputs will lead to a consistent increase in output without any decline.
C
Marginal returns will continuously increase as long as investment in resources continues.
D
There is no relationship between input and output in the production process.
Understanding the Answer
Let's break down why this is correct
Answer
Diminishing marginal returns is an economic principle that explains how adding more of one resource, while keeping others the same, leads to smaller increases in output. For example, imagine a farmer who grows corn on a fixed piece of land. If the farmer adds one more worker, the corn production might increase significantly. However, if the farmer keeps adding more workers, eventually, each new worker will contribute less to the total corn harvest because there’s limited space and resources. This means that while more workers can help, their effect on production becomes less and less over time.
Detailed Explanation
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 because This idea suggests that adding more fixed resources, like machines, will always boost output; This option believes that more resources always lead to more returns.
Key Concepts
diminishing marginal returns
Topic
Diminishing Marginal Returns
Difficulty
easy level question
Cognitive Level
understand
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