In general, the cost of an input:

A. decreases when you've reached the point of diminishing marginal product in your firm.
B. is minimized when you've reached the point of diminishing marginal product in your firm.
C. stays the same when you've reached the point of diminishing marginal product in your firm.
D. increases when you've reached the point of diminishing marginal product in your firm.


Answer: C

Economics

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Economics

Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 36 and WR = 25 and the probability of drought is 0.75. Brandon's risk premium is:

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Economics