Test Flashcards
1
Q
What is the law of diminishing marginal returns?
A
-In shot-run when variable FOP (labour) are added to a stock of fixed FOP (land/capital) total/marginal product will initially rise then fall
2
Q
Short run
A
when there is at least one fixed factor of production
(Capital and Land)
3
Q
How can output be increased in the short run?
A
By increasing labor, the variable factor.
4
Q
What is the relationship between the number of workers and output?
A
More workers initially increase output, then decrease.
5
Q
What are the shapes of the marginal and average product curves?
A
