As successive equal increases in a variable factor of production are added to fixed factors of production, there will be a point beyond which the extra product that can be attributed to each additional unit of the variable factor of production will decline. This is known as the law of
A. diminishing total product.
B. decreasing product.
C. diminishing marginal product.
D. diminishing average product.
Answer: C
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According to this Application, the decrease in consumer wealth due to decreases in the value of home equity has
A) decreased consumer spending. B) decreased the marginal propensity to save. C) increased short-run aggregate supply. D) increased consumer saving.
The figure above shows the marginal revenue, marginal cost, and demand curves for an airline offering daily flights between Los Angeles and Toronto. If the airline is regulated using a marginal cost pricing rule total surplus will be ________
A) $100,000 B) $60,000 C) $80,000 D) $20,000
A substitute good is one that
a. appeals to a wide spectrum of consumers b. is used together with another good c. is exchanged on the black market d. is produced by the same firm as another good e. can be used in place of another good, fulfilling the same basic purpose
The opportunity cost of producing one additional truck is
A. the profit that could have been earned from selling that truck. B. the amount of other goods that could not be produced because productive resources were used instead to produce that truck. C. the price of the truck. D. all of the choices are true.