A firm uses workers and seed to grow lettuce. Its lettuce output rises from 100 tons to 200 tons when the number of workers increases from 25 to 75 . Its production process shows
a. decreasing returns to scale.
b. diminishing returns to labor.
c. increasing long-run average cost.
d. decreasing short-run average variable cost.
b
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Because wealth is more concentrated than income, the Gini coefficient for the wealth distribution is greater than the Gini coefficient for the income distribution.
Answer the following statement true (T) or false (F)
Other things equal, if the labor input grows faster than total output, total factor productivity falls
a. True b. False Indicate whether the statement is true or false
Which of the following is a problem of moral hazard?
A. A lender cannot distinguish good risk from bad risk borrowers. B. Life insurance companies offer an average premium to smokers and non-smokers so they do not have to have two different premiums. C. An individual who purchases auto insurance begins to leave his or her keys in the car while running into a store. D. An auto insurance company charges higher premiums to younger drivers than what they charge to older drivers.