Question

Country A and country B both increase their capital stock by one unit. Output in country A increases by 10 while output in country B increases by 8. Other things the same, diminishing returns implies that country A is:

Answer 1

Answer:

Country A is poorer than country B. If another unit of capital is added to Country A, Output will surely increase, but by less than 10 units.

Explanation:

Diminishing returns is the decrease in output experienced by increasing a single factor of production, while keeping all other factors constant.