Exhibit 6-5 Workers and output data
Laborers
TotalProduct
0
0
1
8
2
20
3
25
4
28
5
29
In Exhibit 6-5, diminishing returns set in when the ____ worker is hired.
A. first
B. second
C. third
D. fourth
Answer: C
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We know that a perfectly competitive firm is a price taker because
A) its MC curve slopes upward. B) its ATC curve is U-shaped. C) its demand curve is horizontal. D) MC and ATC are equal at the profit-maximizing amount of output. E) it has no supply curve.
An unregulated paint factory that pollutes a river results in ______ and _____
A. overproduction; a price that exceeds the marginal benefit from the good B. underproduction; a price that equals the marginal benefit from the good C. the efficient quantity produced; a marginal benefit equal to the mar-ginal social cost D. an inefficient quantity produced; a marginal benefit below the mar-ginal social cost
Investment in the agricultural economy of the antebellum period of U.S. history usually entailed everything below except
(a) Clearing lands (b) Purchasing stocks and bonds (c) Constructing fences and buildings (d) Purchasing farm implements
Suppose workers do not believe the Fed will implement its announced monetary policy plans and the Fed wants to achieve low unemployment. In this situation the Fed would be best off:
a. implementing a policy of high money growth. b. announcing and implementing a policy of low money growth. c. announcing a policy of high money growth and implementing a policy of low money growth. d. following a policy that forces the actual inflation rate to coincide with the expected inflation rate. e. promoting a low rate of inflation and adjusting actual policy plans to economic conditions.