The law of decreasing returns states that as a firm uses more of a
A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases.
B) variable input, total output will increase indefinitely.
C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases.
D) variable input, output will begin to fall immediately.
E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.
C
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If an economy is producing inefficiently, it is
A. possible to increase production of all goods simultaneously. B. possible to increase production of one good at the expense of another. C. not possible to increase production of any good. D. not possible to increase economic growth. E. possible to increase production with no effort.
The rules for respecting property rights as they relate to trade were negotiated during the Uruguay Round (1986-1994 ) and culminated in the Trade Related Aspects Intellectual Property Rights (TRIPS) agreement
Indicate whether the statement is true or false
The purchasing power parity theory predicts that changes in the relative price levels of two countries will affect the exchange rate in such a way that
A) one unit of a nation's currency will buy more foreign goods than it did before the change in the relative price levels. B) one unit of a nation's currency will buy fewer foreign goods than it did before the change in the relative price levels. C) one unit of a nation's currency will continue to buy the same amount of foreign goods as it did before the change in the relative price levels. D) the percentage of depreciation in one currency equals the percentage of appreciation in the other currency.
The infant industry argument for protection is rejected by most economists because:
A. historical experience supports it. B. they oppose any government intervention. C. protection usually is provided only temporarily. D. many infant industries become reliant on protection and do not mature.