Homework SoursePlease explain why this statement is FALSE In an aggregate p
Please explain why this statement is FALSE:
In an aggregate production, output per worker typically increases at an increasing rate as more physical capital per worker is added to the production process.
Please explain why this statement is FALSE:
In an aggregate production, output per worker typically increases at an increasing rate as more physical capital per worker is added to the production process.
In an aggregate production, output per worker typically increases at an increasing rate as more physical capital per worker is added to the production process.
Solution
In an aggregate production, output per worker typically increases at an increasing rate as more physical capital per worker is added to the production process.
False
Reason:- When the more workers are added, due to the law of diminishing marginal productivity, the productivity of workers decreases with each incremented labor. Thus the productivity increases at a fast pace initially, then slows down and finally, it starts becoming negative
