Question on Law of diminishing return

 

Can you please explain me the below question from OliverLehman

71.

A project sponsor requested earned value data on two concurrent projects from the project managers. Both projects are regarded as equally important and strategically beneficial and have been finished by over 80%. He received the following information:

Project A: 

   PV: $1,800,000

   EV: $2,300,000

   AC: $2,100,000

Project B:

   PV: $2,000,000

   EV: $1,500,000

   AC: $1,600,000

The sponsor considers to shift some resources from project A to project B to speed up the second project which is currently behind schedule. 

What is the most likely outcome of such a measure?

1.Changing team assignments during late course of a project typically increases cost efficiency.

2.Changing team assignments during late course of a project typically increases time efficiency.

3.According to the law of diminishing returns, the consolidated cost variance of the two projects will decrease.

4.According to the law of diminishing returns, the consolidated cost variance of the two projects will increase.

Thanks,

Neil