Table 5.1-Labor and output data
-With which unit of labor do diminishing marginal returns first appear in Table 5.1?
A) First
B) Second
C) Third
D) Fourth

Question

Table 5.1-Labor and output data 
-With which unit of labor do diminishing marginal returns first appear in Table 5.1?
A) First 
B) Second 
C) Third 
D) Fourth

Quizplus · Accepted Answer

Diminishing marginal returns first appear with the third unit of labor. The marginal product of labor decreases from 20 to 15 when the third unit of labor is employed. After the third unit, the marginal product of labor continues to decline, indicating diminishing marginal returns. Therefore, it is not efficient to employ further units of labor beyond the third.

Table 5.1-Labor and Output Data