When there are diminishing returns to physical capital, A. each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. B. increasing the amount of physical capital in the production process will not increase output. C. improvements in technology will not be effective in improving output. D. each successive increase in the amount of physical capital per worker leads to a larger increase in productivity.

Question

Campbell Marsh

Social Studies

6 October, 03:47

When there are diminishing returns to physical capital, A. each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. B. increasing the amount of physical capital in the production process will not increase output. C. improvements in technology will not be effective in improving output. D. each successive increase in the amount of physical capital per worker leads to a larger increase in productivity.

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Answers (1)

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Harmony Charles · Answer 1

option A

Explanation:

The correct answer is option A

when there is diminishing return to capital then for the every increase in upcoming amount of physical capital per worker will lead to a smaller increase in productivity of the company.

when the factor of production, as labor, is increased while other factors, such as capital and land remains constant in amount which lead to the output per unit of variable factor diminishing.