For a short-run production function in which output is determined by the number of workers utilized (capital stock held constant), which of the following is FALSE?
A) In general, when there are few workers the marginal product of labor will be increasing.
B) When the marginal product of labor is negative, total product is falling.
C) To determine the marginal product of labor, the capital stock must be held constant.
D) When diminishing returns set in, adding one more worker decreases output.
E) none of the above

Question

Quizplus · Accepted Answer

In the short run, when diminishing returns set in, adding one more worker still increases output, but at a decreasing rate, not decreasing output.

For a Short-Run Production Function in Which Output Is Determined