The upward slope of the supply curve reflects the
A. Principle of diminishing marginal productivity
B. Principle of specialization in production
C. Fact that price and quantity supply are inversely related
D. Law of increasing substitution
Answer: A. Principle of diminishing marginal productivity
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Refer to Figure 23-1. According to the figure above, at what point is aggregate expenditure less than GDP?
A) J B) K C) L D) none of the above
Most of the growth in living standards over the last ten years can be attributed to growth in labor force participation
a. True b. False
Since a monopolistic competitor produces a product with many close substitutes, but none exactly like it. As a result, the firm:
a. has no market power. b. faces a highly inelastic demand curve. c. has unlimited market power. d. has some degree of market power.
What two conditions must hold for a competitive market to produce efficient outcomes?
A. Demand curves must reflect all costs of production, and supply curves must reflect consumers' full willingness to pay. B. Supply curves must reflect all costs of production, and demand curves must reflect consumers' full willingness to pay. C. Firms must minimize production costs, and consumers must minimize total expenditures. D. Firms must maximize profits, and consumers must all pay prices equal to their maximum willingness to pay.