What does the Law of Diminishing Marginal Product state?
What will be an ideal response?
The Law of Diminishing Marginal Product states that the marginal contribution of an input to output is smaller when more of this input is being used in production.
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. A competitive firm's short-run demand for labor will rise when the price of its product rises. 2. Increased use of machinery always hurts workers by lowering the demand for their labor. 3. As the wage rate rises, the marginal revenue product of labor increases. 4. f labor and capital are complements in production, additions to capital will increase both the total and marginal products of labor. 5. When two factors are substitutes in production, an increase in the employment of one increases the marginal product of the other.
Answer the following statement(s) true (T) or false (F)
1. Although a sales tax hurts both producers and consumers, their losses are fully offset by the benefits created by the tax revenues. 2. One effect of a tax is that output in the market which is taxed falls. 3. Even if total surplus is maximized, there is still a chance that there will be a deadweight loss. 4. When the Pareto criterion is used to choose between different policies, any recommendation requires unanimous agreement. 5. If the potential Pareto criterion rejects a policy change, then the efficiency criterion will reject it as well.
Which of the following does the production possibilities curve illustrate?
a. The tradeoffs facing a society b. The fact that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently c. The maximum output that can be produced with a limited amount of resources d. The opportunity cost of alternative choices e. All of these
According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:
a. are considered to be still-developing countries. b. are the major trade partners of the U.S. c. are considered as underdeveloped economies. d. have highly interdependent economies. e. are considered highly-developed countries.