The "law" of diminishing returns asserts that marginal returns will ultimately diminish when the quantity of one input is increased
a. True
b. False
Indicate whether the statement is true or false
True
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How does the adverse selection problem faced by insurance companies differ from the moral hazard problem they face? How might an insurance company deal with each problem?
What will be an ideal response?
If Mia can either wash 10 cars or wax 2 cars during a day, and Daniel can either wash 17 cars or wax 2 cars during a day, then according to the law of comparative advantage,
a. Daniel's opportunity cost of waxing a car is less than Mia's. b. their total output can be expanded if Mia specializes in waxing and Daniel in washing. c. their total output can be expanded if Mia specializes in washing and Daniel in waxing. d. it would be impossible for Daniel and Mia to increase their total output through specialization and mutual exchange.
The points outside the production possibilities frontier are
A) attainable. B) efficient. C) inefficient. D) unattainable.
A firm estimates its long-run production function to beQ = -0.0075K3L3 + 12K2L2Suppose the firm employs 12 units of capital. At ________ units of labor, marginal product of labor begins to diminish.
A. 32.21 B. 44.44 C. 76.66 D. 82.27 E. 66.67