Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Total output will eventually decrease with each additional worker hired.
B
Total output will increase at an increasing rate with each additional worker hired.
C
The additional output produced by each new worker will eventually decrease.
D
There will be no change in output regardless of the number of workers hired.
Understanding the Answer
Let's break down why this is correct
Answer
The principle of diminishing returns tells us that when you keep adding more workers while keeping other factors like machines or space the same, each new worker will contribute less to overall production than the one before. For example, imagine a pizza shop with one oven and one chef; if you hire a second chef, they might help make more pizzas. However, if you hire a third chef, they might start getting in each other's way because there’s not enough oven space for all of them to work efficiently. This means that while adding workers can increase output, there comes a point where each additional worker adds less and less to the total production. Therefore, businesses must think carefully about how many workers to hire based on their available resources.
Detailed Explanation
When you hire more workers, each one adds less extra output than the one before. Other options are incorrect because Some might think that hiring more workers will always lead to less total output; It's a common mistake to believe that more workers always mean faster output growth.
Key Concepts
Diminishing returns
Topic
Marginal Returns and Labor Supply
Difficulty
easy level question
Cognitive Level
understand
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