The law of diminishing marginal productivity implies that the marginal product of a variable input:
A. never declines.
B. eventually declines.
C. always declines.
D. is constant.
Answer: B
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Which of the following is rival and excludable?
A) a public good B) a natural monopoly C) a private good D) a common resource
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which of the following bundles are in Max's opportunity set?
A) a, b, c B) b, d, e C) a, b, d D) None of the above
The mountainous terrain of a particular town allows its inhabitants to produce only coffee or eucalyptus oil. An increase in the opportunities for workers employed in coffee plantations is likely to:
a. shift the labor demand curve for the eucalyptus industry leftward. b. shift the labor demand curve for the eucalyptus industry rightward. c. shift the labor supply curve for the eucalyptus oil industry leftward. d. shift the labor supply curve for the eucalyptus oil industry rightward.
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index rises, and nominal value of the domestic currency remains the same. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.