Explain how it is possible for marginal product to fall while average product is rising?
What will be an ideal response?
Average product can rise even if marginal product is falling as long as the marginal product is higher than the average product.
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Which of the following cases represent the smallest increase in the real national debt?
a. The price level increases by 200 percent and the nominal debt increases by 200 percent. b. The price level increases by 200 percent and the nominal debt increases by 100 percent. c. The price level increases by 200 percent and the nominal debt increases by 500 percent. d. The price level increases by 100 percent and the nominal debt increases by 300 percent. e. None of the above
Demand is more elastic for an item for which few substitutes are available.
Answer the following statement true (T) or false (F)
Does a real-world market have to meet all the assumptions of the theory of perfect competition before it is considered a perfectly competitive market?
A) No, probably no real-world market meets all the assumptions of the theory of perfect competition. All that is necessary is that a real-world market behave as if it satisfies all the assumptions. B) Yes, if a real-world market does not meet the assumptions, then it cannot be considered a perfectly competitive market. C) Yes, unless it is a new market such as the computer market. New markets are not held to the same assumptions as old, more established markets. D) No, but it does have to meet the assumption of producing and selling a homogeneous product. It does not have to fully meet the other assumptions.
Why is the budget line downward sloping?
A. Income effect B. Opportunity costs C. Comparative advantage D. Diminished marginal utility