Diminishing marginal returns implies that:
A. marginal product is decreasing.
B. marginal product is increasing.
C. marginal product is constant.
D. marginal product may be increasing or decreasing.
Answer: A
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Assume that a house is rented by four students. When it comes to keeping the house clean, each of the four roommates has an incentive to leave cleaning to the others. As a result, the house is never clean
Which of the following is the best solution to this problem of free riding? A) Assign one roommate the responsibility to keep a watch over the other students B) Require every roommate to contribute to a cleaning service C) Ask every roommate to clean the house if they dirty it D) Require each roommate to pay more toward the house rent and groceries
In the above figure, the best affordable point is
A) 8 hamburgers and 0 magazines. B) 0 hamburgers and 6 magazines. C) 4 hamburgers and 3 magazines. D) some combination that is not given above.
Most economists would consider it sensible for the federal government to ________ its current operating and capital expenditure budgets and then ________
A) consolidate, never borrow to fund it B) consolidate, borrow what is necessary to fund it C) separate, borrow what is necessary to fund the current operating budget. D) separate, borrow what is necessary to fund the capital expenditure budget.
The theory of rational expectations concludes that
A. the public's expectations can influence the outcome of monetary policy, but not of fiscal policy. B. the public's expectations can influence the outcome of fiscal policy, but not of monetary policy. C. the public's expectations as to the effects of economic policies will tend to reinforce the effectiveness of those policies. D. by reacting in its self-interest to the expected effects of stabilization policy, the public will tend to negate the impact of those policies.