Final answer:
Diminishing marginal productivity refers to the decrease in additional output per worker as more labor is employed. It does not mean the total product is decreasing; rather, total output still increases but at a diminishing rate due to fixed capital constraints. Therefore, the statement is false.
Step-by-step explanation:
The concept of diminishing marginal productivity does not imply a decreasing total product. Instead, it refers to a situation where, as more labor is employed, the additional output or marginal product generated by each new worker begins to decline. Initially, adding more workers may increase the total output, but there comes a point where the extra output each additional worker contributes will start to fall. This scenario often arises due to fixed capital, meaning that the production process has some fixed resources that limit the efficiency of additional workers. For example, if a saw is best operated by two workers, adding a third does not contribute as effectively to the production process, and therefore, the third worker's marginal product is lower than that of the second. However, the total product, or total output, continues to grow but at a diminishing rate. Thus, the correct answer is that diminishing marginal productivity implies decreasing total product? 2) False.