The law of diminishing marginal returns says that as additional units of a variable input are added to
a. fixed amounts of other inputs, total output will eventually remain constant
b. varying amounts of other inputs, total output will eventually decline
c. fixed amounts of other inputs, the resulting increases in total output will eventually become smaller
d. varying amount of other inputs, the resulting increases in total output will eventually become smaller
e. a declining amount of output, technology will eventually deteriorate
C
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Indicate whether the statement is true or false
When two countries trade with one another, it is most likely because
a. the wealthy people in each of the two countries are able to benefit, through trade, by taking advantage of other people who are poor. b. some people involved in the trade do not understand that one of the two countries will become worse-off because of the trade. c. the opportunity costs of producing various goods are identical for the two countries. d. the two countries wish to take advantage of the principle of comparative advantage.
Assuming a multiplier effect, but no crowding-out or investment-accelerator effects, a $100 billion increase in government expenditures shifts aggregate
a. demand rightward by more than $100 billion. b. demand rightward by less than $100 billion. c. supply leftward by more than $100 billion. d. supply leftward by less than $100 billion.
A monopoly may arise due to:
A. a patent. B. network externalities. C. large economies of scale. D. All of these