The law of diminishing marginal productivity implies that opportunity cost:
A. is constant as all inputs are increased to produce successive units of output.
B. increases as all inputs are increased to produce successive units of output.
C. increases as one input is increased to produce successive units of output.
D. is constant as one input is increased to produce successive units of output.
Answer: C
You might also like to view...
Which combination of monetary and fiscal policies might policymakers elect to ward off a potential recession?
A) Fed sale of bonds combined with tax rate increases B) Fed sale of bonds combined with tax rate decreases C) Fed purchase of bonds combined with tax rate increases D) Fed purchase of bonds combined with tax rate decreases
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. She has an effort cost of C = e2 and a reservation wage of $1,500 so that her compensation package is W = 1,500 + 0.2 Q, where the CEO sets the incentive at 0.2 and Q = 200 e. Here effort is known only by the employee. There is a random shock to output each period whose mean is zero. (a) What is the optimal effort for Mary Sue Nelson? (b) On average, what total wage or salary will she earn each month? (c) On average, what is the output of sales contracts that she makes? (d) On average, what kind of profit will the CEO earn off of Nelson's work?
What will be an ideal response?
As noted in the text, which of the following was used by Nintendo to control the video game market?
a. a natural monopoly b. economies of scale c. a government franchise d. exclusive licensing
What is the price of cars if this were a closed economy?
A. $10,000/car B. $6,000/car C. $8,000/car D. $14,000/car