Over the range of diminishing marginal product, if the variable input to a firm is increased:
a. output will increase more than in proportion to the increase in the input
b. output will increase less than in proportion to the increase in the input.
c. output will increase exactly in proportion to the increase in the input.
d. output will increase more than in proportion to the increase in the inputs at first, but it will eventually increase less than in proportion to the increase in the input.
b
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If government spending is increased by $1,000 and taxes are increased by $1,000, the equilibrium level of income will
A. increase by $1,000. B. not change. C. increase by $2,000. D. decrease by $1,000.
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