Multiple Choice
Refer to Figure 2-3. Which point(s) on the Production Possibilities Frontier (PPF) represent productive efficiency?
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2. Introductory Economic Models
Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency
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Refer to Table 13-2. At which number of workers does diminishing marginal product begin?
A
After the first worker is hired
B
After the second worker is hired
C
After the fourth worker is hired
D
After the third worker is hired
Verified step by step guidance1
Understand the concept of diminishing marginal product: it occurs when adding an additional worker results in a smaller increase in total output than the previous worker did.
Look at the marginal product of each worker, which is the additional output produced by hiring one more worker. Calculate it by subtracting the total output with n-1 workers from the total output with n workers.
Compare the marginal product values for each additional worker to identify when the marginal product starts to decrease compared to the previous worker.
Identify the point where the marginal product of the current worker is less than the marginal product of the previous worker; this is where diminishing marginal product begins.
Based on the table data, determine the number of workers after which this decrease in marginal product occurs.
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