All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?
a. Productivity will definitely fall.
b. Productivity will definitely be unchanged.
c. Productivity will definitely rise.
d. None of the above are necessarily correct.
c
You might also like to view...
Suppose the total benefit of watching 1 baseball game is 100, the total benefit of watching 2 games is 120, and the total benefit of watching 3 games is 125. In this case, the marginal benefit of watching the 3rd game is:
A. 125 B. 375 C. 5 D. 41.67
The figure above shows the market for coffee. When the efficient quantity of coffee is produced, the marginal social cost of the last pound is
A) $2.50. B) $3.50. C) $3.00. D) $2.00.
In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of
A) 0aij. B) 0dgh. C) aci. D) obeij.
You receive a $1,000 gift from your grandmother when you graduate from college. Your grandmother withdrew the $1,000 from her checking account and gave you ten $100 bills. You deposit the ten bills into your checking account. Discuss the impact of these transactions on your grandmother's balance sheet, your balance sheet, and the Fed's balance sheet.
What will be an ideal response?