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B2 Braindumps VCE
  • Exam Code: B2
  • Exam Name: Retirement Plans - Design Considerations and Administration

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NEW QUESTION: 1
An upward-sloping short-run marginal cost curve shows that:
A. with a fixed amount of labor, as more and more capital is added, output increases at a decreasing rate, and thus each unit is more expensive than the previous unit.
B. with a fixed amount of capital, as more and more labor is added, output decreases, and thus marginal cost increases.
C. with a fixed amount of capital, as more and more labor is added, output increases at a decreasing rate, and thus each unit is more expensive than the previous unit.
Answer: C
Explanation:
In the short run, capital is assumed fixed. As more labor is added, output will increase, but due to diminishing returns, it will increase at a decreasing rate. Thus the next worker costs the same amount but adds less to production, increasing the marginal cost of the last unit, and resulting in an upward-sloping marginal cost curve.

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