The law of diminishing marginal returns implies that, in the short run:
a. output must fall beyond a certain point.
b. price must fall beyond a certain point.
c. the marginal product of the variable input must eventually decrease.
d. wages of workers must eventually increase.
e. total cost must fall beyond a certain point.
c
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Contractionary monetary policy on the part of the Fed results in
A) an increase in the money supply, an increase in interest rates, and an increase in GDP. B) a decrease in the money supply, an increase in interest rates, and a decrease in GDP. C) an increase in the money supply, a decrease in interest rates, and an increase in GDP. D) a decrease in the money supply, a decrease in interest rates, and a decrease in GDP.
When prices drop in response to a decline in demand for an increasing cost industry
a. producer surplus will increase but rents may decrease. b. rent earned by elastically supplied inputs will decline by more than rent earned by inelastically supplied inputs. c. rent earned by elastically supplied inputs will decline by less than rent earned by inelastically supplied inputs. d. both producer surplus and rents will increase.
At his current level of output, a monopolist has an MR of $10, an MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his or her marginal cost curve upward sloping, the monopolist
A. is producing his or her profit-maximizing level of output. B. could increase his or her profit by increasing his or her output. C. could increase his or her profit by increasing his or her price. D. should exit the market if he or she has positive fixed cost.
Nafta:
A. has increased the standard of living in the North African member nations. B. benefits workers in the participating nations but hurts consumers by raising prices. C. allows completely unrestricted movement of goods, services, and resources between the member nations. D. has reduced most trade barriers between Canada, Mexico, and the United States.