As a firm hires more workers, holding capital and other factors constant, the marginal physical product of labor declines because
A. the amount of other inputs each worker has to work with declines as the number of workers increases.
B. there are diseconomies of scale.
C. less efficient workers are hired as the number of workers increase.
D. workers don't perform well in teams.
Answer: A
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Refer to Figure 9.2. A movement from point d to point b could be caused by a(n)
A) increase in government spending. B) increase in the price of oil. C) increase in taxes. D) decrease in short-run aggregate supply.
The output gap is the
A) difference in graduation levels between high school and college. B) difference between actual inflation and core inflation. C) percentage deviation of real GDP from potential GDP. D) percentage increase in the growth rate of real GDP. E) percentage increase in the growth rate of real GDP minus the unemployment rate.
Economists believe that scarcity forces everyone to:
a. satisfy all their wants. b. abandon consumer sovereignty. c. lie about their wants. d. create unlimited resources. e. make choices.
Evaluate the following statement. The Cournot model basically assumes that the sole decision of each firm in a duopoly is one of determining how much to produce not which price to set
What will be an ideal response?