Diminishing marginal returns occurs as a firm adds more variable inputs to at least one fixed input because:
A. The ability or quality of the variable inputs hired decreases as more are hired
B. The firm must lower the price of its product when it produces more units of output
C. The per unit cost it must pay for variable inputs increases as more inputs are hired
D. As more variable inputs are hired, the amount of the fixed input per variable input decreases
D. As more variable inputs are hired, the amount of the fixed input per variable input decreases
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A monopolistically competitive firm will end up selling its output for a price such that its
A) price is greater than marginal cost. B) price is equal to marginal cost. C) price is equal to marginal revenue. D) price is equal to average total cost.
The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then without government intervention
A) no students will go to college. B) less than 10 million students will go to college. C) 10 million students will go to college. D) more than 10 million students will go to college.
Refer to Table 2-4. What is Jack's opportunity cost of cultivating a garden?
A) one-half of a garden cultivated B) two lawns mowed C) two-thirds of a garden cultivated. D) one and a half lawns mowed
Credit-driven bubbles ________
A) occur exclusively within the financial sector B) are more likely to be identified by central bank officials than by market participants C) are best contained with a policy of high real interest rates D) are harder to identify than expectations-driven bubbles