Question
Asked Oct 17, 2019
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Consider the following production function when K is fixed. (This is a description of the figure: it shows a two-axis graph; in the horizontal axis we measure labor and in the vertical axis we measure meals; the graph of the production function is a line that intersects the vertical axis at a positive amount; this graph is a line with positive slope and passes through the point (4,300)).

Can we say that the production function satisfies the law of decreasing marginal returns of labor?
True
False

meals
300 f(4,K)
labor
4
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meals 300 f(4,K) labor 4

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Expert Answer

Step 1

To determine whether the given production function shows diminishing marginal product of labor or not.

Step 2

Diminishing marginal returns to labor states that after a period, a unit increase in labor leads to smaller increases in the output produced. The output produced initially increases at an increasing rate and then increases at a diminishing r...

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Business

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Labor and labor unions.

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