The version of the law of diminishing returns that applies to production
A. is true only when all inputs are variable.
B. applies only in the short run.
C. implies that as we add more workers our output decreases.
D. applies in the short and long run.
Answer: B
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Which statement is true?
A. Subsidy payments to farmers were almost completely phased out in 2007. B. The so-called new economy of the 1990s was neither new, nor very different from the economy of the previous 25 years. C. Until the time of the Great Depression, the United States was primarily an agricultural nation. D. There were no recessions during the presidency of Bill Clinton (January 1993-January 2000).
John’s Bait Shop was surprised to learn that when it raised prices by 10 percent, total revenue was unaffected. This is because the elasticity for bait is
A. unit elastic. B. inelastic. C. elastic. D. Not enough information is given.
Prior to almost all recessions since 1950, there has been a drop in
A) inflation. B) the money stock. C) the growth rate of the money stock. D) interest rates.
A sudden increase in the market demand in a competitive industry leads to
a. Losses in the short-run and average profits in the long-run b. Above average profits in the short-run and average profits in the long-run c. New firms being attracted to the industry d. Both B&C