In the context of the production function and diminishing returns, what effect has the introduction of robotics had on manufacturing?

• A. It has eliminated the need for capital in the production process.
• B. It has caused the law of diminishing returns to occur at lower levels of input.
• C. It has decreased overall output by replacing skilled workers with machines.
• D. It has increased the marginal product of labor by allowing workers to be more productive.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of the production function, which relates inputs (like labor and capital) to the output produced. It shows how output changes when the quantity of inputs changes.
2. Step 2: Recall the law of diminishing returns, which states that as more units of a variable input (e.g., labor) are added to fixed inputs (e.g., capital), the additional output from each new unit of input eventually decreases.
3. Step 3: Consider how the introduction of robotics affects the production process. Robotics can be seen as an improvement in capital that complements labor, making workers more efficient rather than replacing the need for capital.
4. Step 4: Analyze the impact on the marginal product of labor (MPL), which is the additional output produced by one more unit of labor. Robotics typically increase MPL by enhancing worker productivity through better tools and automation.
5. Step 5: Conclude that robotics do not eliminate capital or reduce output; instead, they increase the productivity of labor, shifting the production function upward and potentially delaying the onset of diminishing returns.