The principle that "as one input increases while the other inputs are held fixed, output increases at a decreasing rate" is known as the:
A. marginal principle.
B. principle of opportunity cost.
C. principle of diminishing returns.
D. spillover principle.
Answer: C
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If current aggregate expenditure equals current production, an economy is in equilibrium
a. True b. False Indicate whether the statement is true or false
As one moves down a straight-line demand curve, the elasticity decreases
a. True b. False Indicate whether the statement is true or false
After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat, the nation began importing wheat. As a result, total surplus in the wheat market increased by $10 million. Which of the following changes could have occurred as well?
a. The price of wheat in that nation increased with the adoption of the new policy. b. The domestic quantity of wheat supplied increased with the adoption of the new policy. c. Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million. d. Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.