In the short run, the marginal-revenue product curve is ________ because of ________.
A. downward sloping; diminishing returns
B. upward sloping; increasing returns
C. downward sloping; increasing returns
D. upward sloping; diminishing returns
Answer: A
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What is the real interest rate if the nominal interest rate is 7 percent and the expected inflation rate is 7 percent?
Some economists object to having the Fed concentrate solely on price stability because it would
A) make stabilizing the economy more difficult. B) lessen its credibility. C) privatize the Federal Reserve. D) free the Fed from political pressure.
The Federal Reserve Bank of ________ houses the open market desk
A) Boston B) New York C) Chicago D) San Francisco
Decreasing returns to scale may occur because increasing the amount of inputs used
A) increases specialization. B) always increases the amount of output produced. C) may cause coordination difficulties. D) increases efficiency.