The law of diminishing marginal productivity does not apply in the long run because:
A. no inputs are fixed in the long run.
B. some inputs are fixed in the long run.
C. all inputs are fixed in the long run.
D. some inputs are variable in the long run.
Answer: A
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The free-rider problem faced by private information-collection firms results in their
A) usually going out of business within a few years. B) collecting less than all the available information about the firms they investigate. C) being plagued by lawsuits. D) charging fees higher than can be justified by market conditions.
Define the term scarcity and discuss two of its consequences
Which of the following accurately describe where long-run equilibrium happens in the monopolistically competitive firm?
a. At P and q*, long-run demand equals average marginal cost and long-run marginal revenue equals total cost.
b. At 0 and q*, long-run demand equals average total cost and long-run marginal revenue equals marginal cost.
c. At P and q*, long-run demand equals average total cost and long-run marginal revenue equals marginal cost.
d. At 0 and q*, long-run demand equals average marginal cost and long-run marginal revenue equals total cost.
Which of the following is NOT true of GDP?
A. Total production of new goods and services B. Includes real and financial assets C. Includes expenditures on goods and services D. Includes incomes produced in production