Answer the following statements true (T) or false (F)
1. As output increases, marginal cost increases, reaches a maximum, and then falls.
2. So long as marginal cost is rising, average variable cost must rise.
3. The principle of diminishing marginal returns is applicable only to the use of labor as a productive resource.
4. The principle of diminishing marginal returns says that as more and more units of a variable resource are added to a set of fixed resources, the resulting additions to output will become increasingly smaller and, eventually, larger.
5. The major factor accounting for dis economies of scale is management inefficiency.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
5. TRUE
You might also like to view...
If a single supplier of labor, such as a union, were supplying labor to a single monopsonistic employer, this is referred to as a(n)
A) bilateral monopoly. B) trilateral monopoly. C) total monopsony. D) collective monopoly.
One should be wary of consultants peddling best practices or secrets to success because
a. They have different incentives than you do b. Such best practices are public knowledge and easily duplicated c. These best practices can at best only provide temporary profitability d. All of the above
What is the most important determinant of aggregate demand?
a. investment b. government spending c. consumption d. net exports
Refer to the diagram for a specific economy. Which of the following best describes the relationship shown by this curve?
A. The demand for labor is large when the rate of inflation is low.
B. When the rate of unemployment is high, the rate of inflation is high.
C. The rate of inflation and the rate of unemployment are inversely related.
D. The rate of inflation and the rate of unemployment are directly related.