Question

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

  A. 40, 40, 40

  B. 40, 43, 48

C. 40, 34, 32

  D. 40, 35, 38

I know the answer is C but im not sure how to find it

Answer 1

We know that according to the traditional view of the production function ,the marginal product of labor or capital decreases as more of labor or capital respectively is used. So, as capital per worker goes on increasing from 5 to 6 and then from 6 to 7 and then from 7 to 8 units of capital per worker , then marginal product of capital per worker goes on decreasing . From all the given options , we can see that the option (C) correctly describe that condition , here addition to output per worker i.e marginal product of capital per worker decreases from 40 to 34 , and then to 32. Hence, option(C) is correct.