Diminishing marginal returns implies
A. decreasing average variable costs.
B. increasing marginal costs.
C. decreasing marginal costs.
D. decreasing average fixed costs.
Answer: B
You might also like to view...
A monopoly faces an inverse demand curve of P = 100 - 2Q. The marginal cost curve is MC = .5Q. What government price ceiling would represent optimal price regulation?
What will be an ideal response?
Assume the typical shapes of the demand and supply curves. If both demand and supply increase in a competitive market, the equilibrium price will
a. always rise b. always fall c. rise if demand increases more than supply increases d. fall if demand increases more than supply increases e. remain unchanged
Banks cannot influence the money supply if they are required to hold all deposits in reserve
a. True b. False Indicate whether the statement is true or false
According to the Ricardian equivalence theorem, a tax cut that increases the government budget deficit will have
A. no effect on aggregate demand because people realize that there will be a future tax liability so that there is no increase in consumption expenditures. B. a positive effect on aggregate demand because people look at changes in taxes or government spending in the present. C. no effect on aggregate demand because people only look at changes in taxes or government spending in the present. D. an effect on aggregate demand. The magnitude the effect will have depends upon whether the increase is caused by a reduction in taxes or an increase in government spending.