If one of the primary factors of production is held constant, two-dimensional production functions typically have a curved shape that reflects the ____________ of the factor that is being allowed to vary.
A)increasing rate of saving
B)diminishing marginal productivity
C)increasing nominal GDP
D)diminishing marginal utility

Question

Quizplus · Accepted Answer

Two-dimensional production functions usually have a curved shape due to the law of diminishing marginal productivity, which states that as the amount of a variable factor of production (such as labor or capital) is increased while other factors are held constant, the marginal productivity of that factor will eventually decrease. This results in a curved shape, with the marginal product initially increasing and then decreasing as output increases. The other options, such as increasing rate of saving or nominal GDP, do not directly relate to the shape of the production function. Diminishing marginal utility refers to the decreasing satisfaction a consumer gets from consuming additional units of a good, which is also unrelated to the shape of production functions.

If One of the Primary Factors of Production Is Held