Exhibit 7-1 Production of Pizza Data -Exhibit 7-1 Shows the Change in the Short-Run Production of |

Exhibit 7-1 Production of pizza data $$\begin{array} { | c | c | } \hline \text { Workers } & \text { Pizzas } \\\hline 0 & 0 \\1 & 4 \\2 & 10 \\3 & 15 \\4 & 18 \\5 & 19 \\\hline\end{array}$$
-Exhibit 7-1 shows the change in the short-run production of pizzas as more workers are hired. The table shows the marginal product of the labor input is decreasing with the hiring of the third worker. A possible reason for this diminishing marginal product is:

A) decreased wages.
B) increases in plant size.
C) decreases in fixed cost.
D) increased division of labor as additional workers are hired.
E) decreases in labor productivity.

Correct Answer:

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