The law of diminishing marginal returns:
a. states that each and every increase in the amount of the variable factor employed in the production process will yield diminishing marginal returns
b. is a mathematical theorem that can be logically proved or disproved
c. is the rate at which one input may be substituted for another input in the production process
d. none of the above
d
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An increase in demand for oil, along with a simultaneous increase in supply of oil, will
A. increase price, but whether it increases quantity depends on how much each curve shifts. B. increase quantity, but whether it increases price depends on how much each curve shifts. C. increase price and decrease quantity. D. decrease price and increase quantity.
The relationship between the unemployment rate and inflation is studied under:
A) microeconomics. B) macroeconomics. C) behavioral economics. D) international economics.
In a private closed economy, when aggregate expenditures equal GDP:
A. consumption equals investment. B. consumption equals aggregate expenditures. C. planned investment equals saving. D. disposable income equals consumption minus saving.
When an oligopoly is in a Nash equilibrium
A) firms have colluded to set their prices. B) firms will not behave as profit maximizers. C) a firm will not take into account the strategies of its rivals. D) a firm will choose its best pricing strategy, given the strategies that it observes other firms have taken.