Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
diminishing marginal returns
B
increasing returns to scale
C
constant returns to scale
D
marginal utility
Understanding the Answer
Let's break down why this is correct
Answer
The answer to the question is "diminishing marginal returns. " This principle explains that as you add more workers to a fixed amount of resources, like machines or space, each new worker contributes less to the overall output than the previous one did. For example, imagine a pizza shop with only one oven. If you keep hiring more cooks, at some point, they won't be able to make more pizzas because there isn't enough oven space for everyone to cook at the same time. So, while more workers can initially boost production, eventually, their impact starts to shrink as the limited resources can't keep up with the growing number of employees.
Detailed Explanation
This principle explains that adding more workers can lead to less and less extra output. Other options are incorrect because This idea suggests that as you add more resources, output increases more than proportionally; This means that adding more resources keeps output the same.
Key Concepts
Diminishing marginal returns
Labor supply
Productivity
Topic
Marginal Returns and Labor Supply
Difficulty
easy level question
Cognitive Level
understand
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