If the marginal product of an input is falling, then
A) average fixed cost is constant.
B) marginal cost is falling.
C) average total cost is constant.
D) marginal cost is rising.
Answer: D
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A fall in the money wage rate shifts
A) both the SAS and LAS curves rightward. B) both the SAS and LAS curves leftward. C) the SAS curve rightward but leaves the LAS curve unchanged. D) the LAS curve rightward but leaves the SAS curve unchanged.
Explain how each of the following events would affect the aggregate demand curve
a. Lower interest rates b. A decrease in net exports c. A decrease in the price level d. Slower income growth in other countries e. A decrease in imports
If one firm in a perfectly competitive industry is somehow able to produce at a lower cost than competing firms in the short run,
a. the competing firms will adopt similar production techniques in the long run. b. the more efficient firm will earn higher profits than the competing firms in the long run. c. the competing firms will earn higher profits than the more efficient firm in the short run. d. the competing firms will go out of business in the long run.
If a firm's average cost is declining, setting price equal to marginal cost will
a. maximize the firm's profits. b. minimize the firm's losses. c. guarantee that the firm will lose money. d. help the firm earn the opportunity costs of its resources.