The law of ________ explains why a marginal revenue product schedule eventually declines.
A. increasing marginal opportunity costs
B. diminishing marginal returns
C. increasing marginal returns
D. diminishing marginal opportunity costs
Answer: B
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Under which conditions might diseconomies of scale result?
A. improved coordination brought about by bureaucracy B. decreasing costs of inputs C. increasing output prices D. increased bureaucracy
Instead of trying to balance the budget every year, it is easier to:
A. balance the budget over the business cycle. B. allow deficit spending only in times of economic downturn. C. allow surpluses to build during times of economic booms. D. All of these statements are true.
The curve that shows quantities of total real output that will be offered for sale at various price levels is called the
a. aggregate demand curve. b. domestic investment curve. c. aggregate supply curve. d. yield curve.
When there is an inflationary gap: a. Real output exceeds the natural level of real output. b. Real output equals the natural level of real output
c. Real output is less than the natural level of real output. d. Any of the above is possible.