According to the law of diminishing returns
A) the total product of an input will eventually be negative.
B) the total product of an input will eventually decline.
C) the marginal product of an input will eventually be negative.
D) the marginal product of an input will eventually decline.
E) none of the above
D
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Which of the following is an important lesson that can be drawn from the experience of the Great Depression?
a. Frequent shifts in monetary policy can help smooth out unstable economic conditions during a recession. b. Trade restrictions can "save jobs" and expand total employment during an economic downturn. c. The good intentions of political decision-makers are no substitute for sound policy. d. The federal government should always balance its budget during a recession.
The federal government decides to impose a 15% excise tax on luxury yachts. An economist would suggest that:
a. this is an effective way to indirectly tax the wealthy b. the tax incidence will fall largely on those who buy luxury yachts c. if prospective buyers decide to purchase other luxury goods instead, the tax incidence will largely fall on those who build and sell luxury yachts d. the price of luxury yachts will rise by 15%
During 2007-2008, the price of gasoline increased from approximately $1.50 to $4.00 per gallon. As a result, the
A) supply of gas guzzling automobiles decreased, causing their price to increase. B) supply of gas guzzling automobiles increased causing their price to fall. C) demand for gas guzzling automobiles, such as the Hummer, decreased, causing their price to decline. D) demand for gas guzzling automobiles increased, causing their price to increase.
Assume that you observe the long-run average cost curve of ACME Bookstores, a national chain. Starting from the point on the curve where output is zero and moving to the right, which of the following lists the behavior of long-run average costs in the
correct sequence (that is, which will be observed first, second, etc.)? A) minimum efficient scale; economies of scale; constant returns to scale; diseconomies of scale B) economies of scale; constant returns to scale; diseconomies of scale; minimum efficient scale C) constant returns to scale; economies of scale; minimum efficient scale; diseconomies of scale D) economies of scale; minimum efficient scale; constant returns to scale; diseconomies of scale