Given the table below,if capital is fixed at one unit,diminishing returns begin with the $$\begin{array}{l}
\quad\quad\quad\quad\quad \text { Units of Capital }\
\begin{array} { c c c c c }
& & 1 & 2 & 3 \
\text { Units } & 1 & 80 & 100 & 120 \
\text { of } & 2 & 180 & 220 & 260 \
\text { Labor } & 3 & 270 & 330 & 390 \
& 4 & 340 & 420 & 500 \
& 5 & 390 & 490 & 590 \
& 6 & 410 & 530 & 650
\end{array}
\end{array}$$ Amount of total output produced from various combinations of labor and capital.
A)first unit of labor.
B)second unit of labor.
C)third unit of labor.
D)fourth unit of labor.
E)none of the above

Question

Given the table below,if capital is fixed at one unit,diminishing returns begin with the $$\begin{array}{l}
\quad\quad\quad\quad\quad \text { Units of Capital }\
\begin{array} { c c c c c } 
& & 1 & 2 & 3 \
 \text { Units } & 1 & 80 & 100 & 120 \
\text { of } & 2 & 180 & 220 & 260 \
\text { Labor } & 3 & 270 & 330 & 390 \
& 4 & 340 & 420 & 500 \
& 5 & 390 & 490 & 590 \
& 6 & 410 & 530 & 650
\end{array}
\end{array}$$ Amount of total output produced from various combinations of labor and capital.
A)first unit of labor.
B)second unit of labor.
C)third unit of labor.
D)fourth unit of labor.
E)none of the above

Quizplus · Accepted Answer

Diminishing returns occur when the increase in output becomes smaller as more units of variable input (labor) are added while holding the amount of fixed input (capital) constant. Looking at the table, we see that total output increases from 80 to 270 as we increase labor from 1 to 3 units, an increase of 190 units of output. When we add the fourth unit of labor, total output only increases from 270 to 340, an increase of only 70 units of output. This marks the point of diminishing returns, so the best choice is C, the third unit of labor.

Given the Table Below,if Capital Is Fixed at One Unit,diminishing