Question

DE Figure 11-1 Real GDP per hour worked, YIL Production function, Production function, Production function IC 18 1 $40 60 Capital per hour worked, KIL Refer to Figure 11-1. Diminishing marginal returns is illustrated in the per-worker production function in the ngure above by a movement from Production function to Production function 2 from Production function 2 to Production function 1 from Production function to Production function 3 up alone any of the production functions

Answer 1

Production function denotes the relationship between the real output and the quantity of resources such as labor and capital employed.

The slope of the production function denotes the rate of change of output at a given level of capital-worker ratio. The diminishing marginal returns is denoted by the continuously decreasing nature of the slope of the production function as it denotes a gradual decrease in the rate of change of output per each additional unit of resource employed .i.e., the marginal return from each additional unit of resource employed diminishes gradually.

Ans: up along any of the production functions