As more labor is hired, moving along the production function, diminishing returns occur because
A) workers are overworked and so their productivity decreases.
B) the wage rate paid is too low and so workers decrease their work effort.
C) there are fixed quantities of other resources.
D) the real wage rate must increase in order to hire additional workers.
E) real GDP increases more rapidly the more workers are hired.
C
You might also like to view...
The study of factors that contribute to the economic development of a country is
A) development economics. B) the theory of technological advancements. C) population growth economics. D) the new technology theory.
Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers. As a result,
A) individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. B) the quality of health care provided is less than it would be if benefits were taxed. C) politicians are encouraged to raise income and payroll taxes. D) the federal government spends more than it receives in tax revenue.
If tax reduction and simplification are effective, then
A) fewer new firms will be established, since existing firms will make more profit. B) saving and investment in new capital will increase. C) interest rates will rise in financial markets and demand for financial assets falls. D) real wages will rise as labor supply and demand increase.
The 1990s and 1920s have which of the following in common?
(a) Growth in real output, real output per person, employment and productivity (b) Changes in the levels of nominal output, money supply and participation in the stock market (c) Similar expansions in the stock markets at the end of each period (d) All of the above