Question

Some economies are able to maintain high growth rates despite diminishing returns to capital by using

A. better or enhanced​ technology, along with accumulating​ capital; these economies are growing because​ technology, unlike​ capital, is subject to increasing returns.
B. a newer production method​ that, if used​ properly, produces increasing returns to capital.
C. a​ labor-intensive technology because​ labor, unlike​ capital, is not subject to diminishing returns.
D. a larger proportion of​ capital, thereby making their production capital​ intensive, so the sheer volume of capital protects them from diminishing returns to capital.

Answer 1

The answer is: A) better or enhanced​ technology, along with accumulating​ capital; these economies are growing because​ technology, unlike​ capital, is subject to increasing returns.

Step-by-step explanation:

Capital ,as a factor of production, is limited by the "Law of Diminishing Marginal Returns ". This concept states that at certain point, using an additional factor of production will result in a smaller increase of the total output.

For example, if you have a machine in a factory and you increase the other factors of production (labor and materials), the output will be limited by the total possible output of the machine. Once it works 24 hours a day, seven days a week, and 52 weeks per year, it will reach the maximum output.

The only way you can bypass this law is by the introduction of new and better technologies, e.g. the only way to increase output in the factory is to get a bigger or better machine.