Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 7 - Businesses and the Costs of Production - Quick Quiz for Figure 7.2 - Page 146: 1

Answer

Option: d. Workers are of equal quality.

Work Step by Step

The law of diminishing returns assumes that all units of labor are of equal quality. Each successive worker is presumed to have the same innate ability, motor coordination, education, training, and work experience. Marginal product ultimately diminishes, but not because successive workers are less skilled or less energetic. It declines because the firm is using more workers relative to the amount of plant and equipment available.
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