Diminishing marginal returns occur when:
A) units of a variable input are added to a fixed input and total product falls.
B) units of a variable input are added to a fixed input and marginal product falls.
C) the size of the plant is increased in the long run.
D) the quantity of the fixed input is increased and returns to the variable input fall.
B
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which shows the production possibilities frontier for mufflers and socks. The opportunity cost of moving from point b to d is _____
a. equal to 30 mufflers. b. equal to 50 mufflers. c. equal to 100 socks. d. equal to 150 socks. e. equal to 250 socks.
The price at which a good or service is traded on international markets is called the ________ price.
A. international B. world C. market D. universal
Which of the following will NOT occur in the short run when the money supply decreases?
A. The interest rate will increase. B. The price level decreases. C. People will buy fewer goods and services. D. Aggregate supply decreases.
The sum of personal consumption expenditure, investment expenditure, government expenditure, and net export expenditure on the total amount of real output in the economy in a given period of time is called:
A) potential GDP. B) aggregate expenditure. C) real money balances. D) none of the above.