What is the law of diminishing marginal product?
What will be an ideal response?
The law of diminishing marginal product states that, after some point, successive equal increases in a variable input added to fixed inputs will generate smaller and smaller increments in output. That is, after some point, the marginal physical product from adding a variable input to one or more fixed inputs will decrease.
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Consider a perfectly competitive industry in a long-run equilibrium. If a single firm in that industry discovers a significant cost-saving production technology, then:
A. the firm will earn an economic profit in the long run. B. the rest of the industry will quickly adopt the new technology. C. all firms in the market will earn an economic profit in the short run. D. all the firms in the market will earn an economic profit in the long run.
Assuming no change in the nominal exchange rate, how will a higher rate of inflation in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The real exchange rate will be unaffected. C) The real exchange rate will fall. D) The impact on the real exchange rate cannot be predicted.
All of the following are economic functions of the government EXCEPT
A) providing a legal system. B) determining the wage rate for most jobs. C) promoting competition in the market. D) providing public goods.
Marginal utility must be positive
a. True b. False Indicate whether the statement is true or false