Capital and labor are distinct from productivity in that ________.
A)productivity is independent of technology changes
B)productivity can only increase over time
C)productivity is subject to diminishing returns
D)capital and labor are subject to diminishing marginal returns

Question

Quizplus · Accepted Answer

Capital and labor are subject to diminishing marginal returns, meaning that as more units of either input are added, the increase in productivity will eventually decrease. Productivity, on the other hand, can be influenced by technology changes, and may not necessarily increase over time or be subject to diminishing returns. Therefore, option (D) is the best choice.

Capital and Labor Are Distinct from Productivity in That ________