Suppose you run a pizza shop and currently have two employees. If you hire a third employee, your output of pizzas per day rises from 55 to 65. If you hire a fourth employee, output rises to 80 per day. A fifth and sixth employee would cause output to rise to 90 and 95 per day, respectively. Pick the correct statement:
A. Diminishing returns set have not yet set in because output is still increases.
B. Diminishing returns set in with the hiring of the sixth worker.
C. Diminishing returns set in with the hiring of the fourth worker.
D. Diminishing returns set in with the hiring of the fifth worker.
Answer: D
You might also like to view...
Economists argue that:
a. accounting costs consider all types of costs including implicit costs b. there is an opportunity cost associated with all decisions. c. economic decisions do not have opportunity costs but other decisions do. d. economic decisions should consider sunk costs
Which of the following would cause the demand for labor to change?
a. c and e. b. A change in the cost of living. c. Changes in the wage rate. d. Movements along the labor demand curve. e. A change in the price of the good produced.
You bought some shares of stock and sell them one year later. At the end of the year, the price per share was 5 percent higher and the price level was 3 percent higher. Before taxes, you experienced
a. both a nominal gain and a real gain, and you paid taxes on the nominal gain. b. both a nominal gain and a real gain, and you paid taxes only on the real gain. c. a nominal gain and a real loss, and you paid taxes on the nominal gain. d. a nominal gain and a real loss, and you paid no taxes on the transaction.
If the Fed decides to use an open market operation to reduce the money supply by $1 million, and if the money multiplier is 10, then what total amount of Treasury securities must the Fed initially sell?
A. $10,000,000. B. $1,000,000. C. $100,000. D. $10,000.