Question: Production Process 1 Production Process 2 Production Process 3 Units of Units Additional Units Units Additional Units Units Additional capital of output of of output

Production Process 1 Production Process 2 Production Process 3 Units of Units Additional Units Units Additional Units Units Additional capital of output of of output of of output labor produced capital labor produced capital labor produced 5 10 12 15 80 1 4 12 W W 6 7 12 16 84 2 4 9 7 4 12 17 87 4 7 (Table 6.1) Diminishing marginal returns to labor occur in production process and diminishing marginal returns to capital occur in production process a) 1; 3 O b) 2 ; 1 O c) 2; 3 O d) 1; 1

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