If a firm is experiencing diminishing marginal returns to labor, which of the following must be true?
a. The first workers the firm hired were better than the workers hired later on.
b. The firm is experiencing decreasing returns to scale.
c. The positive effect of specialization in production is being offset by the negative effect of crowding of inputs.
d. Output is decreasing.
e. The firm should buy more nonlabor inputs.
C
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The law of diminishing marginal utility implies it is possible that the marginal utility of my tenth pistachio nut is less than the marginal utility of my third pistachio nut, other things constant
a. True b. False
The concavity or bowed-out shape of the production possibilities frontier is the result of
a. the law of downward-sloping demand. b. the law of upward-sloping demand. c. the principle of increasing cost. d. complementarity in consumption.
Entrepreneurship is
a. restricted to perfect competition. b. occurs only in well-functioning markets. c. the process of planting new crops. d. the process of taking business risks.
A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is
a. $100. b. $175. c. $700. d. $225.