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

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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