The second stage of production illustrates the concept of____________, the stage where output increases at a diminishing rate as more units of a variable input are added.
Fill in the blank(s) with the appropriate word(s).
Ans: diminishing returns
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Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900. You may find it easier to answer the following questions if you fill in the payoff matrix below. 
width="383" />For Joe, keeping his price at $3 per gallon is a: A. profit-maximizing strategy. B. dominated strategy. C. revenue-maximizing strategy. D. dominant strategy.
Assume the marginal propensity to consume (MPC) is 0.80 and the government increases taxes by $100 billion. The aggregate demand curve will shift to the:
A. left by $80 billion. B. right by $200 billion. C. right by $400 billion. D. left by $400 billion.
Refer to the information provided in Figure 3.4 below to answer the question(s) that follow.
Figure 3.4Refer to Figure 3.4. If consumer income increases, the demand for tuna fish sandwiches shifts from D0 to D1. This implies that tuna fish sandwiches are a(n)
A. complementary good. B. substitute good. C. normal good. D. inferior good.
The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What is the opportunity cost of increasing the production of rice to 15 tons?
A) 9 thousand bottles of wine B) 12 tons of rice C) 6 thousand bottles of wine D) 15 thousand bottles of wine E) Nothing, it is a free lunch.