State the law of diminishing returns. How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer
What will be an ideal response?
The law of diminishing returns states that at some point, adding more of a variable input to the same amount of a fixed input will eventually cause the marginal product of the variable input to decline. The law applies in the short run when there is at least one fixed factor of production. Diseconomies of scale applies in the long run when a firm is free to vary all of its inputs. Diseconomies of scale exist when a firm's long-run average cost rises as it increases output.
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If two duopolists can stick to a cartel agreement to boost their prices, then both
A) earn greater profits than if they did not collude. B) price at marginal cost. C) price below average total cost. D) decrease their economic profits. E) increase their production so that each produces more than if they did not collude.
Serena Williams should pay someone else to mow her lawn instead of mowing it herself, unless
a. Serena has an absolute advantage over everyone else in mowing her lawn. b. Serena has a comparative advantage over everyone else in mowing her lawn. c. Serena's opportunity cost of mowing her lawn is higher than it is for everyone else. d. All of the above are correct.
Which one of the following is among the Federal Reserve's tools to control short-term interest rates?
A. Limits on credit card interest rates B. Raising or lowering taxes on financial institutions C. Controlling the demand for money D. Open market operations
At an output of zero, total cost is
A. zero. B. equal to fixed cost. C. equal to variable cost. D. cannot be found.