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AP® Macroeconomics

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Moderate

Returns and Growth

APMACR-OFYPE1

When a firm makes a change to its production resources (such as adding additional labor), and yields more output than the prior change brought about by the same increase, then

A

the firm is experiencing increased marginal returns.

B

the firm is experiencing decreased marginal returns.

C

the firm is experiencing negative marginal returns.

D

the firm should not add any more laborers.

E

the firm is not calculating productivity correctly.