What happens when a firm encounters diminishing returns? What causes diminishing returns?
What will be an ideal response?
The firm encounters diminishing returns when the marginal product of variable inputs declines. This occurs because other inputs are unchanged in the short run.
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Adverse selection tends to cause which of the following?
a. Placing a strain on the insurance system b. Requiring participation in insurance exchanges c. Mandating the payment of insurance premiums d. Increasing the size of insurance risk groups
The velocity of money is the:
A. relationship between the money supply and the price level. B. number of times per year the average dollar is spent on final goods and services. C. relationship between asset and transactions demands for money. D. price level divided by aggregate supply.
Why might product development be efficient and why might it be inefficient?
What will be an ideal response?
In order to produce 100 oatmeal cookies, Goodie Cookie Co incurs an average total cost of $0.25 per cookie. The company's marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is _____
a. $25 b. $20 c. $50 d. $60