Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 16

Suppose the quantity of capital is fixed at 10 units in Figure 5.8. Explain, by drawing a horizontal line rightward from 10 K , the short-run law of diminishing marginal returns discussed in the body of this chapter. Hint: Observe the distance between the isoquants along your horizontal line.