As a result of a labeling mistake at the chemical factory, a farmer accidentally sprays weedkiller rather than fertilizer on half her land. As a result, she loses half of her productive farmland. If the property of diminishing returns applies to all factors of production, she should expect to see the marginal productivity of her remaining land
a. increase.
b. remain unchanged.
c. decrease but remain positive.
d. decrease and become negative.
a
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________ shifts the consumption function upward
A) A decrease in the marginal propensity to consume B) An increase in the price level C) An increase in the real interest rate D) An increase in expected future disposable income E) An increase in disposable income
If autonomous consumption is equal to $80, then when income is zero, saving is
a. $0 b. –$20 c. –$80 d. $20 e. $80
Voluntary trade promotes economic progress because it
a. moves goods, services and resources from people who value them more to individuals who value them less. a. moves goods, services and resources from people who value them more to individuals who value them less. b. encourages individuals to become self-sufficient. c. makes larger outputs possible as a result of specialization. d. benefits buyers at the expense of sellers.
Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 If Smith and Jones are dividing their time efficiently and producing more than 10 computers and fewer than 120 calculators per hour, then Smith will ________ and Jones will ________.
A. split his time between computers and calculators; produce only computers B. produce only computers; split his time between computers and calculators C. produce only calculators; produce only computers D. produce only computers; produce only calculators