📚 Learning Guide
Marginal Returns and Labor Supply
easy

As more workers are hired, the increase in output begins to decline due to the principle of __________, where additional labor results in progressively smaller increases in productivity while other inputs remain constant.

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose 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

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.