In a short-run production function before diminishing returns set in, both MPL and APL will have
A. negative slopes and MPL will lie above APL.
B. positive slopes and MPL will lie above APL.
C. positive slopes and APL will lie above MPL.
D. negative slopes and APL will lie above MPL.
Answer: B
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In the traditional Keynesian model, an increase in government spending raises total planned real expenditures by more than the original increase in government spending because
A) of the crowding-out effect on consumption spending. B) consumption spending is not related to real GDP. C) consumption spending depends positively on real GDP. D) consumption spending depends negatively on real GDP.
Which of the following is a characteristic of a monopoly?
a. a large number of sellers b. homogeneous products c. large barriers to entry d. price taking firms
If the government wanted to reduce the quantity of a good traded, it could do so by: a. setting a price ceiling for the good below the equilibrium price. b. setting a price floor for the good above the equilibrium price. c. taxing the good more heavily
d. doing any of the above.
Which of the following would be classified as consumption spending?
a. A family's purchase of a new home b. A family's purchase of a used car c. A family's payment for a child's hospitalization d. A family's purchase of Microsoft stock e. A family's purchase of a swing set for their home day-care business