All other things staying the same,an increase in the amount of labor would cause the marginal productivity of capital to

A) remain the same.
B) decrease.
C) increase.
D) increase at a decreasing rate and then remain constant.

Question

NATTHANICHAPHAT SAOSUNGKHONGCHAROEN · Accepted Answer

Final Answer : C, Explanation :  An increase in the amount of labor would cause the marginal productivity of capital to increase because more labor means more resources are available to combine with the existing capital, resulting in increased output. This is the law of diminishing marginal returns, which states that as more units of a factor of production are added while other factors remain constant, the marginal product of the additional unit will eventually decrease, but this occurs after a certain point of increasing marginal returns. Therefore, in the short run, an increase in labor will increase the marginal productivity of capital.

All other things staying the same,an increase in the amount of labor would cause the marginal productivity of capital to

A) remain the same.
B) decrease.
C) increase.
D) increase at a decreasing rate and then remain constant.

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Related questions

All other things staying the same,an increase in the amount of labor would cause the marginal productivity of capital toA) remain the same.B) decrease.C) increase.D) increase at a decreasing rate and then remain constant.

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Learning Objectives

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Related questions

All other things staying the same,an increase in the amount of labor would cause the marginal productivity of capital to

A) remain the same.
B) decrease.
C) increase.
D) increase at a decreasing rate and then remain constant.