Identify the correct statement
a. When there are diminishing but positive returns the total product curve is falling.
b. When there are diminishing but positive returns the total product curve is rising, at an increasing rate.
c. When there are negative marginal returns, the total product curve is declining, but not necessarily negative.
d. When there are negative marginal returns, the total product curve is rising.
c
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Assume that Clara purchases a combination of products Y and Z such that, after she is done spending her limited income, MUy/Py = 25 and MUz/Pz= 15. Based on the equal marginal principle, Clara
A. is maximizing her total utility. B. should have purchased less Y and less Z. C. should have purchased more Y and less Z. D. should have purchased less Y and more Z.
A decrease in the demand for chocolate with no change in supply will create a ________ of chocolate at today's price, but gradually the price will ________
A. surplus; fall B. shortage; fall C. surplus; rise D. shortage; rise
Collusion occurs when
A) there is an agreement among firms to charge the same price or otherwise not to compete. B) firms refuse to follow their price leaders. C) a firm chooses a level of output to maximize its own profit. D) two firms' price and output decisions come into conflict.
The Hound Dog Bus Company contemplates expanding its Virginia operations by offering service from Fairfax to Arlington. The total cost of the trip would be $120, of which $50 is fixed cost, which it has already paid. The firm expects to earn $60 in revenue from the trip. The Hound Dog Bus Company should
a. offer this service because it will earn a positive economic profit b. not offer this service because the marginal revenue is less than the marginal cost c. offer this service because the revenue exceeds fixed cost d. not offer this service because the total cost exceeds the total revenue e. offer this service because the added revenue exceeds the added cost of this service