There is a famous economics saying that argues "if diminishing marginal productivity never set in then the world could be fed from a flower pot." Explain what this means economically
What will be an ideal response?
What this is saying is if diminishing marginal productivity doesn't hold then it would be possible to add more labor and more seed and fertilizer to the flower pot and one would be able to grow as much food as one desired without limit. Of course we know that the flower pot itself is a real limitation and that adding more labor, seed and fertilizer will quickly lead to diminishing returns.
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What is the average cost per unit for producing 3 units? a. 200. b. 260. c. 70
d. 110.
Price indexes like the CPI are calculated using a base year. The term base year refers to:
a. any year in which inflation was higher than 5 percent. b. the most recent year in which the business cycle hit the trough. c. an arbitrarily chosen reference year. d. the first year that price data are available.
Answer the following statement true (T) or false (F)
1) The availability heuristic refers to people purchasing what is most easily accessible. 2) The self-serving bias causes people to act only in their self-interest. 3) The overconfidence effect exists when people underestimate their chances of being wrong. 4) Framing effects may cause the same person to view the same new situation differently depending on whether that new situation makes him or her better or worse off.
A competitive firm will use a factor of production as long as its marginal revenue product exceeds its unit cost.
Answer the following statement true (T) or false (F)