The principle that if the amount of labor and other inputs is held constant, then the greater the amount of capital in use, the less an additional unit of capital adds to production is called the principle of
A. increasing average capital productivity.
B. decreasing output per unit of capital.
C. increasing returns to capital.
D. diminishing returns to capital.
Answer: D
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One reason the Medicare system costs so much is
A) the amount of medical services is determined by the equilibrium of supply and demand. B) the supply of medical services does not respond to price changes. C) supply and demand analysis does not apply. D) beneficiaries are entitled to receive services for which the per-unit cost exceeds their own personal out-of-pocket payment.
Evidence suggests that the marginal social cost of pollution reduction: a. increases as pollution reduction increases
b. remains constant as pollution reduction increases. c. decreases as pollution reduction increases. d. equals zero since it is beneficial to reduce pollution.
In a country, the adult population equals 100,000. There are 50,000 people unemployed and 40,000 people are employed. The labor force participation rate equals
A. 90 percent. B. 50 percent. C. 40 percent. D. an undetermined amount given the lack of information.
Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q0 and that government purposely shifts the market supply curve from S to S1 in diagram (a) on the left and from S to S2 in diagram (b) on the right. We can conclude that the government is correcting for
A. positive externalities in both diagrams. B. negative externalities in diagram (a) and positive externalities in diagram (b). C. negative externalities in both diagrams. D. positive externalities in diagram (a) and negative externalities in diagram (b).