Consider the following set of data that looks at how output changes following changes in inputs. Quantity of Labour Quantity of Capital Output 0 5 0 10 5 100 20 5 250 30 5 450 40 5 575 50 5 650 Which of the following statements accurately describes what this data shows? (a) The firm experiences increasing marginal returns to labour at all levels of output. (b) The firm experiences first increasing marginal returns to labour and then runs into diminishing marginal returns. (c) The firm experiences diminishing marginal returns to labour at all levels of output. (d) The firm experiences first diminishing marginal returns to labour and then increasing marginal returns
Consider the following set of data that looks at how output changes following changes in inputs. Quantity of Labour Quantity of Capital Output 0 5 0 10 5 100 20 5 250 30 5 450 40 5 575 50 5 650 Which of the following statements accurately describes what this data shows? (a) The firm experiences increasing marginal returns to labour at all levels of output. (b) The firm experiences first increasing marginal returns to labour and then runs into diminishing marginal returns. (c) The firm experiences diminishing marginal returns to labour at all levels of output. (d) The firm experiences first diminishing marginal returns to labour and then increasing marginal returns
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.7P
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Consider the following set of data that looks at how output changes following changes in inputs.
Quantity of Labour |
Quantity of Capital |
Output |
0 |
5 |
0 |
10 |
5 |
100 |
20 |
5 |
250 |
30 |
5 |
450 |
40 |
5 |
575 |
50 |
5 |
650 |
Which of the following statements accurately describes what this data shows?
(a) The firm experiences increasing marginal returns to labour at all levels of output.
(b) The firm experiences first increasing marginal returns to labour and then runs into diminishing marginal returns.
(c) The firm experiences diminishing marginal returns to labour at all levels of output.
(d) The firm experiences first diminishing marginal returns to labour and then increasing marginal returns.
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