Multiple Choice
(Table: Capital and Labor II) Which of the following statements is (are) TRUE? I. A combination of 4 units of capital and 2 units of labor produces the same amount of output as a combination of 3 units of capital and 3 units of labor.
II) If labor is fixed at 3 units, adding more capital increases output at an increasing rate.
III) If capital is fixed at 2 units, adding more labor results in diminishing returns.
IV) A combination of 3 units of capital and 4 units of labor produces 171.4 units of output.
A) I, II, III, and IV
B) II, III, and IV
C) III and IV
D) IV
Correct Answer:

Verified
Correct Answer:
Verified
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