According to the principle of diminishing returns, if all factors of production but one are held constant and if that one factor is doubled, then eventually output will most likely:
A. double too.
B. less than double.
C. more than double.
D. remain unchanged.
Answer: B
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Indicate whether the statement is true or false
You purchase a bag of chocolate chips for $3, a bag of flour for $1, a bag of sugar for $.50, a half dozen eggs for $.50, and a half pound of butter for $2. You use all these ingredients to make three dozen cookies. Your roommate offers you $15 for them, and you happily accept. How much does this process contribute to GDP?
A. $7 B. $15 C. $22 D. $8
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What is government failure, and how would it be demonstrated on a production possibilities curve?
What will be an ideal response?