According to the Law of Diminishing Marginal Returns, as additional units of one input are employed as all other inputs are held constant, total output will eventually ______.
A. decrease
B. increase at an increasing rate
C. increase at a decreasing rate
D. increase at a constant rate
C. increase at a decreasing rate
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A disadvantage of moving too quickly is that
A) costs of entry are higher. B) the likelihood of misunderstanding the demand is greater. C) followers gain an advantage by learning from the first-mover. D) All of the above.
Monetarists believe that the aggregate supply curve is relatively steep in the short and long runs. This means they expect
A. inflation with no change in output. B. increases in output to bring much inflation. C. increases in output to bring little inflation. D. decreases in output to bring much inflation.
The combination of food and clothing shown by point G on the above graph:
A. results only because society allocates its resources inefficiently. B. can be attained only if some of society's resources are unemployed. C. suggests that the law of increasing relative costs is not operating in this case. D. is not attainable, given society's available resources and technology.
Suppose that you lend $5,000 to a friend who pays you back $5,400 the next year. Suppose that prices that year rose by six percent and the real rate of return in the stock market was five percent. Your friend says that he or she was being more than fair by giving you more than the rate of inflation as a return. What do you think?
What will be an ideal response?