The Flattening Out of the Production Function Is Likely to Occur
The flattening out of the production function is likely to occur
A) only in a model without capital or technology.
B) in any model where there are fixed factors.
C) only in a model without labor.
D) only in a model without technology.
E) only in a model with labor, capital, and technology.
Which of the following statements is true about an economy whose production function includes only capital and labor?
A) Diminishing returns to capital can occur for the economy as a whole.
B) Adding more capital per worker cannot raise real GDP beyond some limit.
C) The production function yields a pessimistic conclusion about economic growth.
D) To get to the point where the return from an additional unit of capital equals zero requires an extremely large investment share of GDP.
E) All of these
Increasing the stock of capital enables more output to be produced.