If the law of diminishing marginal productivity holds true, both average total cost and marginal cost must diminish as output increases.
Answer the following statement true (T) or false (F)
False
When marginal product begins to fall, marginal cost begins to rise. Both the average total cost curve and the marginal cost curve are typically U-shaped. In particular, the law of diminishing marginal productivity refers to the part of the curves where both average total cost and marginal cost increase as output increases.
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Refer to the scenario above. The real GDP of the country in Year 1 was ________
A) $280,000 B) $2,200,000 C) $540,000 D) $1,400,000
Within the AD/AS model, if an unanticipated reduction in aggregate demand results in less than the full-employment rate of output,
a. the natural rate of unemployment will increase. b. long-run aggregate supply will increase. c. lower resource prices and declining interest rates will direct the economy back to full employment. d. higher resource prices and rising interest rates will direct the economy back to full employment.
Suppose the demand for labor shifts rightward due to economic growth, but the supply of labor remains unchanged. How does this affect the market outcome under an efficiency wage equilibrium?
A) Efficiency wage and employment are higher B) Efficiency wage is lower, employment is higher C) Efficiency wage is higher, employment is lower D) Efficiency wage and employment are lower
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.