4.1.4.3 The law of diminishing returns and returns to scale

Why might a small cafe experience negative returns from adding employees during morning rush?

• Not enough room for all employees to work in the same space
• Increased marginal output by adding a worker isn't worth it
• It wouldn't; more employees always means faster service
• They don't care about customer service

The Law of Diminishing Returns is more applicable in the...

• short run
• long run
• both of the choices
• none of the choices

Law of Diminishing Returns states - as 1 input variable is increased, there is a point at which

• the marginal per unit output decreases
• the marginal per unit output is zero
• the marginal per unit output is negative
• nothing is produced

At what unit of fertilizer does the Law of Diminishing Returns set in?

• 3

• 4

• 1

• 6

When increasing one input variable leads to a decrease in total output, the firm encounters...

• Negative marginal product

• Output problems
• Long-term adjustments
• The law of diminishing returns

If all factors of production can be changed, then it is operating in the:

• long run
• short run
• Trump administration
• none of the above

The law of diminishing returns operates in the:

• short run
• short run and the long run
• neither the short run nor long run
• long run

The ___ is the change in total product that results from one additional unit of an input

• marginal product
• break-even
• product output
• fixed cost

Which of the following data sets represents the law of diminishing returns?

• 0, 3, 7, 12, 16, 12

• 10, 8, 6, 4, 2

• 1,4,7,10,13,16

• 2, 4, 8, 16, 32

The marginal product can

• be positive, negative or zero
• use the absolute value
• be negative
• be positive