The law of diminishing returns indicates that the marginal physical product of a factor declines as more:
A. Output is produced with the most efficient combination of factors.
B. Of the factor is used, holding output constant.
C. Of the factor is used, holding other inputs constant.
D. Of the good is consumed.
Answer: C. Of the factor is used, holding other inputs constant.
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Suppose there are 8 firms in an industry, and each has a different market share. If the largest firm has twice the market share of the second largest, which has twice the market share of the third largest (and so on to the eighth firm), what is the approximate four-firm concentration ratio?
a. 65 percent b. 84 percent c. 94 percent d. 60 percent e. 50 percent
If the government removes a binding price floor from a market, then the price paid by buyers will
A. decrease, and the quantity sold in the market will increase. B. decrease, and the quantity sold in the market will decrease. C. increase, and the quantity sold in the market will decrease. D. increase, and the quantity sold in the market will increase.
Who did President Jimmy Carter appoint to head the Federal Reserve beginning in 1979?
a. Ben Bernanke b. Alan Greenspan c. Paul Volcker d. Arthur Burns
In the above figure, which of the following points indicates the efficient use of resources?
A. a B. f C. h D. g