Economics Multiple Choice Question – 2 May 2023

Which statement explains why in the short run labour is subject to the law of diminishing returns?

Select ONE answer:

1. As additional workers are hired, output decreases.
2. As employment increases, the capital-labour ratio falls.
3. As employment increases, wage rates will have to be increased.
4. As output expands, sooner or later diseconomies of scale will set in.

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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