Diminishing marginal returns refers to the fact that
a. holding other inputs constant, additional increases in labor lead to smaller changes in output.
b. holding other inputs constant, additional increases in labor lead to lower output.
c. additional increases in labor always lead to smaller changes in output
d. the returns to labor fall as real wages rise.
A
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Tradeoffs involve an exchange of one thing for another because resources are limited and can be used in different ways
Indicate whether the statement is true or false
Refer to the above table. How many worker will this firm hire if the weekly wage rate is $1350?
A) 28 B) 25 C) 26 D) 27
Deadweight loss is the net loss of:
a. consumer surplus. b. producer surplus. c. disequilibrium surplus. d. both a and b.
Each of the following is consistent with Keynesian theory EXCEPT
A. Sometimes strong government intervention is necessary to end a depression. B. The expected rate of profit is more important than the interest rate in determining the level of investment in an economy. C. Our economy always tends toward equilibrium GDP but not necessarily full employment GDP. D. Flexible wages and prices present in modern economies will end a recession.