Questions: 42. The optimal method of production is the one that a. maximizes output regardless of cost. b. maximizes input use. c. minimizes cost. d. minimizes the normal rate of return on capital. 43. If labor is a variable input in production, the law of diminishing marginal returns implies that in the short run a. labor's marginal product is constant. b. labor's marginal product eventually decreases. c. total product is negative. d. total product is negative after a certain point has been reached.

The answer to question 42 is: c. minimizes cost.

Explanation:

• a. maximizes output regardless of cost: This is not optimal because it ignores the cost aspect, which is crucial for efficiency and profitability.
• b. maximizes input use: This is not optimal because it does not consider the efficiency or cost-effectiveness of the inputs.
• c. minimizes cost: This is the correct answer because the optimal method of production is one that achieves the desired level of output at the lowest possible cost, ensuring efficiency and profitability.
• d. minimizes the normal rate of return on capital: This is not optimal because it would not be sustainable for the business in the long run.

The answer to question 43 is: b. labor's marginal product eventually decreases.

Explanation:

• a. labor's marginal product is constant: This is incorrect because the law of diminishing marginal returns states that the marginal product of a variable input will eventually decrease as more of it is used.
• b. labor's marginal product eventually decreases: This is the correct answer because the law of diminishing marginal returns implies that adding more of a variable input (like labor) to a fixed input will eventually result in smaller increases in output.
• c. total product is negative: This is incorrect because the total product does not become negative; it just grows at a decreasing rate.
• d. total product is negative after a certain point has been reached: This is incorrect because the total product does not become negative; it may plateau or increase at a decreasing rate, but it does not turn negative.