"Marginal cost eventually increases because of the law of diminishing returns." True or false? Explain
What will be an ideal response?
The statement is true. The law of diminishing returns means that each additional worker produces a successively smaller addition to output. So to get an additional unit of output, ever more workers are required. Because more workers are required to produce one additional unit of output, the cost of the additional unit of output—marginal cost—must increase.
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According to this Application, which of the following is NOT a strategy that the government can pursue to address the rising cost of federal retirement and health care programs?
A) increase the age at which retirement benefits begin to be paid B) promote government saving and investment to increase real GDP over time C) borrow from the public to finance the programs D) reform the health care system to encourage more competition to reduce health care expenditures
Based on the per capital income data for selected countries in 2009, India, Brazil, and China can be categorized as high-income economies
Indicate whether the statement is true or false
If Kahneman and Tversky are correct, I should
A. be indifferent which type of investment I make. B. buy individual stocks rather than put my money into a mutual fund. C. have opposite strategies depending on whether my investments will rise or fall. D. put my money in a mutual fund instead of individual stocks.
If demand increases and supply simultaneously decreases, equilibrium price will rise.
Answer the following statement true (T) or false (F)