MICRO-Which of the following scenarios best repres

Which of the following scenarios best represents the concept of diminishing marginal returns? A) A factory produces more goods as it hires more workers B) A student gets lower grades as they study more hours without breaks C) A company sees its profits rise with increased advertising spend D) A farmer grows more crops with every additional acre of land cultivated

B

Key Concept

Diminishing marginal returns

Explanation

The concept of diminishing marginal returns states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. In the scenario described in option B, a student getting lower grades as they study more hours without breaks, it represents diminishing marginal returns. Initially, studying more hours may lead to improved grades, but after a certain point, the student's productivity and focus may decline, resulting in lower grades. This is an example of diminishing marginal returns in the context of studying.

What is the relationship between the number of workers hired and the level of production in a factory?, Generate me a similar question

What is the relationship between the number of workers hired and the level of production in a factory?

answer: The relationship between the number of workers hired and the level of production in a factory is typically positive.

Key Concept

The relationship between the number of workers hired and the level of production is known as the law of diminishing marginal returns.

Explanation

According to the law of diminishing marginal returns, as more workers are hired in a factory, the level of production initially increases at an increasing rate. However, after a certain point, the additional output produced by each additional worker starts to decrease. This is because there are limited resources and space in the factory, and adding more workers beyond a certain point leads to inefficiencies and reduced productivity. Therefore, while the relationship between the number of workers hired and the level of production is positive, it eventually reaches a point of diminishing returns.

How does the marginal product of labor affect the level of production in a factory?, Generate me a similar question

Generate me a similar question

What is the law of diminishing marginal returns and how does it affect the level of production in a factory?

Answer the question

❌ Your Answer is incorrect answer: The law of diminishing marginal returns states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. This means that each additional unit of the variable input will contribute less and less to the total output.

Key Concept

Law of diminishing marginal returns

Explanation

The law of diminishing marginal returns is a fundamental concept in microeconomics that explains how the addition of more inputs can lead to a decrease in the marginal product of those inputs. In the context of a factory, this means that as more workers or machines are added to the production process, the increase in output will eventually start to decline. This occurs because the fixed input, such as the size of the factory or the amount of capital equipment, cannot be easily changed to accommodate the increasing variable input. As a result, the additional units of the variable input become less productive and the overall efficiency of production decreases.

What are the factors that can lead to diminishing marginal returns in a factory's production?, Generate me a similar question

AskSia

Plus