Multiple Choice
Assume that 1 laborer produces 6 units of output, 2 laborers produce 14 units, 3 laborers produce 20 units, and 4 laborers produce 24 units. Diminishing returns to labor set in
A) when the firm hires the first laborer.
B) never; diminishing returns have not set in, and total output is still increasing.
C) when the firm hires the second laborer.
D) when the firm hires the third laborer.
E) when the firm hires the fourth laborer.
Correct Answer:
Verified
Correct Answer:
Verified
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