Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:
A. cost-benefit principle.
B. principle of comparative advantage.
C. principle of increasing opportunity costs.
D. scarcity principle.
Answer: C
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Each of the following is a provision of the 1996 welfare reform law except that
A. lifetime welfare benefits would be limited to five years. B. each state receives a lump sum to run its own welfare and work programs. C. any adult found guilty of a felony would be removed from the welfare rolls. D. future legal immigrants are banned from welfare assistance.
Which of the following statements is correct?
A) The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. B) Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. C) Social Security benefits are received by people who had contributed to the fund during their active work years. D) As a public transfer payment, Social Security benefit is available only to the poor.
Which statement is true?
A. Price is calculated by dividing output by total revenue. B. The lowest point on the short-run supply curve is at the break-even point. C. When price exceeds marginal cost, a profit-maximizing firm will decrease production. D. The marginal cost curve intersects the average total cost curve at the break-even point.
A real estate salesperson sells a house in 2015 that was built in 2005. How does this transaction get counted in the GDP statistics?
A. The price of the house and the real estate salesperson’s commission are both included in 2015’s GDP. B. Neither the price of the house nor the commission is included in 2015’s GDP. C. The real estate salesperson’s commission but not the price of the house is included in 2015’s GDP. D. The price of the house would be included in both 2005’s GDP and the GDP for 2015.