The law of diminishing marginal returns states that
a. long-run average cost declines as output increases
b. if the marginal product is above the average product, the average will rise
c. as units of a variable input are added to a given amount of fixed inputs, the marginal product of the variable input eventually diminishes
d. as a person consumes more of a good, the marginal satisfaction from that good eventually diminishes
e. if marginal product is positive, total product rises
C
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An actuarially fair return means
A. returns on investments are indexed to the stock market. B. returns on investments have to be positive. C. benefits received, on average, would be equal to the premiums paid. D. premiums for insurance are generally paid by the government.
Mr. Calhoun owned land on which cotton could be grown, but which he had been unable to rent for years. Suddenly he was getting offers from cotton farmers to lease his land. Which of the following best explains this change in circumstances? a. The price of cotton decreased
b. The price of cotton increased. c. The productivity of the land increased. d. Property taxes on the land increased.
The economy's supply of loanable funds is
a. a result of firms' borrowing decisions b. a vertical line at the current level c. downward sloping d. a result of people's saving decisions e. the same as wage-related rent
The price of a new textbook increased by 35 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?
A. It decreased by 5 percent. B. It increased by 5 percent. C. It increased, but we can't tell by how much without more information. D. It decreased, but we can't tell by how much without more information.