The boss observes that her 10 workers produce 1,000 widgets a day. She concludes that she can employ 20 workers and make 2,000 widgets, 30 to make 3,000 . or 40 to make 4,000 . Explain why this observation is either correct or incorrect
She is most likely incorrect because of the law of diminishing returns. Adding more and more of a variable resource (labor) to a fixed resource (the factory and machinery) should cause output to increase, but at a decreasing rate. If the company is experiencing diminishing returns, we might expect something like 20 workers producing 1,800 units, 30 producing 2,500 units, and 40 producing 3,300 units.
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What will be an ideal response?
Gross private domestic investment
a. excludes all investment in the United States by foreign firms b. includes all capital in the United States c. includes net additions to the capital stock plus all new corporate stocks and bonds d. includes expenditures on new factories, tools, and machinery e. excludes the expenditures on residential structures and the cost of changes in inventories
A financial asset is considered ________ if it can be sold in a secondary market
A) a commodity B) a security C) a liability D) durable
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