According to the law of diminishing marginal returns, as more of a variable input is combined with fixed amounts of other resources:
a. the additions to output will eventually decrease.
b. the additions to output cannot increase.
c. total output will eventually decrease.
d. the additions to output will eventually turn negative.
a
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When firms price their products by adding a percentage markup to their average costs of production, this is called
A) cost-plus pricing. B) rounding up. C) break-even pricing. D) average cost pricing.
The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be
A) higher exchange rates or higher unemployment. B) higher inflation or a stronger economy. C) higher inflation or a weaker economy. D) lower inflation or a stronger economy.
What is the best example of the law of supply?
What will be an ideal response?
?Exhibit 10A-1 Aggregate demand and supply model
Given the shift of the aggregate demand curve from AD1 to AD2 in Exhibit 10A-1, the real GDP and price level (CPI) in long-run equilibrium will be:
A. $8 billion and 150. B. $12 billion and 200. C. $8 billion and 250. D. $8 billion and 200.