The law of diminishing marginal productivity implies that increasing only one input will:
A. lead to smaller and smaller increases in output.
B. lead to larger and larger increases in output.
C. not increase output.
D. lead to identical increases in output.
Answer: A
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The vertical long-run Phillips curve
a. indicates the permanent unemployment rate b. indicates the unemployment rate at the optimal level of GDP c. is only one of several vertical curves that together are called interest rate targets d. indicates the economy's natural rate of unemployment e. is more socially desirable than a horizontal Phillips curve would be
Government-run employment agencies and public training programs both seek to reduce frictional unemployment
a. True b. False Indicate whether the statement is true or false
If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections the Fed would
a. raise interest rates to shift aggregate demand left. b. raise interest rates to shift aggregate demand right. c. reduce interest rates to shift aggregate demand left. d. reduce interest rates to shift aggregate demand right.
What is a risk measure?
a. Alpha b. Required return on the market portfolio c. Standard deviation of historical returns