What happens to marginal productivity as workers who are equally good at their job are added to a firm?
a. The increase in workers will eventually cause marginal product to fall.
b. Marginal product will rise at a steady rate.
c. Marginal product will neither rise nor fall.
d. Product quality will improve as the new workers gain experience.
a. The increase in workers will eventually cause marginal product to fall.
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The costs of investment depend on the ________ and the ________.
A. price of new capital goods; real interest rate B. relative price of the firm's output; real interest rate C. marginal product of capital; relative price of the firm's output D. taxes levied on the revenue generated; relative price of the firm's output
Approaching a business cycle peak, actual real GDP ________ natural real GDP, which causes inflation to ________
A) exceeds, remain constant B) exceeds, accelerate C) is less than, decelerate D) equals, accelerate E) equals, remain constant
The unregulated profit maximizing monopolist prefers to operate where demand is inelastic
Indicate whether the statement is true or false
Suppose that an economy's output does not change from one year to the next, but the price level doubles. What happens to real GDP?
A. Real GDP doubles B. Real GDP is halved C. Real GDP doesn't change D. There is not enough information to determine what happens to real GDP