The Law of Increasing Cost is based upon which of the following?
A. If units of a resource are added to a fixed proportion of other resources, eventually marginal output will decline.
B. Economies of scale eventually outweigh diseconomies of scale.
C. Resources become more suitable for use in the production process as the output of one good expands.
D. All of the choices are true.
A. If units of a resource are added to a fixed proportion of other resources, eventually marginal output will decline.
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In the 1948-2012 data, the unemployment rate was highest in
A) 2009 B) 1991 C) 1975 D) 1982
When the rate of interest (or price of capital) decreases, the
a. quantity demanded of loanable funds by the firm will decrease b. quantity demanded of loanable funds by the firm will increase c. firm's MRP of capital increases d. firm's MPP of capital increases e. firm's MRP of capital decreases
According to international trade theory, a country should:
A. import goods in which it has an absolute advantage. B. specialize in the production of the good in which it has an absolute disadvantage. C. export goods when it has either a comparative or absolute disadvantage in producing them. D. specialize in the production of the good in which they have a comparative advantage.
The demand for labor and other factors of production typically decline in a recession because those factors
A. Are derived from the demand for final output, which also declines in a recession. B. Are no longer offered for sale in factor markets. C. Have become more expensive than before the recession. D. Have become relatively scarcer than before the recession.