Law of Diminishing Marginal Returns

Which stage of production does output increase at a slower rate as more variables are added?

• Diminishing returns

• Break-even point

• Profit-maximizing quantity of output

As more of one unit of input is added to a fixed amount of other inputs, the marginal product decreases.  Thus costs per unit are rising, so more price must be gained to cover these costs.

• Law of Diminishing Marginal Product

• Law of Supply

• Increase in Demand

• Scale of Production

Stage of production where output increases at a decreasing rate as more units of variable input are added.

• Marginal product

• Short run

• Diminishing returns

• Long run

Which economic principle explains why adding more workers to a fixed amount of capital eventually leads to less efficient production?

• Law of Diminishing Marginal Returns

• Law of Supply

• Law of Demand

• Law of Increasing Returns

In the context of agriculture, what happens when more fertilizer is added to a fixed amount of land?

• The yield increases indefinitely

• The yield decreases

• The yield increases at a decreasing rate

• The yield remains constant

What is the primary cause of diminishing marginal returns in a production process?

• Lack of technology

• Overuse of fixed resources

• Increase in demand

• Decrease in supply

Which of the following best describes the Law of Diminishing Marginal Returns?

• Output increases at an increasing rate

• Output decreases as more input is added

• Output increases at a decreasing rate

• Output remains constant

In which stage of production does the Law of Diminishing Marginal Returns become apparent?

• Initial stage

• Intermediate stage

• Final stage

• All stages

How does the Law of Diminishing Marginal Returns affect the cost of production?

• Decreases cost per unit

• Increases cost per unit

• Has no effect on cost

• Fluctuates cost unpredictably

What happens to the marginal product of labor when the Law of Diminishing Marginal Returns sets in?

• It increases

• It decreases

• It remains constant

• It becomes negative