If a firm is experiencing diminishing returns to a variable input, then:
a. it must be hiring less-productive units of the variable resource.
b. it must be experiencing diseconomies of scale.
c. the marginal physical product of the variable input must be decreasing.
d. the average physical product of the variable input must be decreasing.
e. its total product must be decreasing.
c
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The money demand curve will shift to the left if:
A. the nominal interest rate decreases. B. the price level increases. C. ATM machines are introduced. D. the nominal interest rate increases.
Why do consumers sometimes take a while to respond to price changes?
(A) Consumers need time to decide whether the good is a luxury or a necessity. (B) Price changes do not affect consumers. (C) Demand sometimes becomes less elastic over time. (D) Consumers cannot find acceptable substitutes immediately.
Which of the following changes could have shifted AE1 to AE2?
a. an overall increase in income
b. an overall decrease in income
c. in increase in the interest rate
d. an increase in consumer confidence
The "true" costs of inflation to an economy include all of the following except:
A. shoe-leather costs. B. higher relative prices. C. unexpected redistribution of wealth. D. noise in the price system.