Which of the following statements best summarizes the law of diminishing marginal returns?
A) In the short run, as more labor is hired, output diminishes.
B) In the short run, as more labor is hired, output increases at a diminishing rate.
C) In the short run, the amount of labor a firm will hire diminishes as output increases.
D) As more labor is hired, the length of time that defines the short run diminishes.
B
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A higher nominal interest rate ________ the profit-maximizing level of MPK for firms, leading firms to a ________ capital-output ratio, thus ________ net investment
A) raises, higher, raising B) raises, lower, lowering C) lowers, higher, raising D) lowers, higher, lowering E) lowers, lower, raising
Which of the following is a short run adjustment? a. A bakery hiring two additional bakers
b. Two new firms enter the textile industry. c. Three firms leave the bicycle industry. d. A computer hardware company builds a new factory.
A country that experiences a large deficit in the merchandise trade account should always aim at eliminating this trade deficit by adopting strict foreign trade policies
a. True b. False Indicate whether the statement is true or false
We experienced the highest inflation during the period from
A. 1958 to 1961. B. 1961 to 1964. C. 1978 to 1981. D. 1984 to 1987.