Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The marginal product increases indefinitely
B
The marginal product eventually decreases
C
The marginal product remains constant
D
The marginal product becomes negative immediately
Understanding the Answer
Let's break down why this is correct
Answer
The law of diminishing returns tells us that when you keep adding more workers (labor) to a fixed amount of equipment or tools (capital), each additional worker will contribute less and less to the total output. For example, imagine a small bakery with one oven. If you hire one baker, they can make a lot of bread, but if you hire a second baker, they can still make a lot too. However, if you then hire a third baker, they might have to wait for the oven to be free, so they do not add as much to the total bread made. This means that while more labor can increase production, each new worker will eventually produce less than the one before, showing that there are limits to how much output you can get from your fixed resources.
Detailed Explanation
The law of diminishing returns means that adding more workers to a fixed amount of tools or machines will eventually lead to less output per worker. Other options are incorrect because Some might think that more workers always mean more output; It's a common mistake to think that adding workers keeps output the same.
Key Concepts
law of diminishing returns
Topic
Marginal Product and Labor Costs
Difficulty
easy level question
Cognitive Level
understand
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