The best definition of inflation is a(n):
a. temporary increase in prices.
b. increase in the price of one important commodity such as food.
c. persistent increase in the general level of prices as measured by a price index.
d. increase in the purchasing power of the dollar.
c
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Diminishing marginal returns occur when:
A) units of a variable input are added to a fixed input and total product falls. B) units of a variable input are added to a fixed input and marginal product falls. C) the size of the plant is increased in the long run. D) the quantity of the fixed input is increased and returns to the variable input fall.
Refer to the above table. How do we know that this is not a competitive firm?
A) The marginal physical product decreases as the amount of labor hired increases. B) The marginal revenue changes as output changes. C) The marginal revenue product decreases as the amount of labor increases. D) Marginal physical product cannot be computed for competitive firms.
Suppose the distribution of innate ability is distributed symmetrically throughout a population but that the wage distribution is positively skewed. What most likely explains this?
A. a decreasing Gini coefficient. B. a noncompetitive labor market C. differences in human capital accumulation. D. decreased immigration. E. a regressive tax code.
Nondiversifiable risk refers to potential losses from:
A. random fluctuations in specific stocks. B. bad company policies. C. portfolio management fraud. D. events that move all investments in the same direction.