Question

Which of the following statements is consistent with the fact that capital in an economy is subject to diminishing returns? When workers already have a large quantity of capital, giving them an additional unit of capital will not increase productivity. When workers have a relatively small quantity of capital, giving them an additional unit of capital will not increase their productivity. When workers have a relatively large quantity of capital, giving them an additional unit of capital increases their productivity by a large amount. When workers have a relatively small quantity of capital, giving them an additional unit of capital increases their productivity by a relatively large amount.

Answer 1

When workers already have a large quantity of capital, giving them an additional unit of capital will not increase productivity.

Step-by-step explanation:

In simple words, In economics, decreasing returning relates to the phenomenon of reduction in a manufacturing process 's total efficiency as the volume of one particular production factor decreases progressively, whereas the numbers of many other capital resources stay unchanged.

For eg, a manufacturing plant hires employees to make its goods, and the corporate works at an optimum level eventually. With several other persistent output variables, the introduction of additional staff above the optimal point would lead in less productive operations.