In the short run, why does a production function eventually display diminishing returns to labor?
A) As a firm hires more workers the skills and the work ethic of the additional workers will eventually decline.
B) The opportunity cost of hiring additional workers must eventually rise.
C) As the number of workers increases eventually the gains from the division of labor and specialization are used up.
D) As the number of workers increases it becomes difficult to monitor them.
C
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Refer to Table 2-1. Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 50 hot wings would appear
A) along Dina's production possibilities frontier. B) inside Dina's production possibilities frontier. C) outside Dina's production possibilities frontier. D) at the vertical intercept of Dina's production possibilities frontier.
If a manufacturer sells goods abroad for less than they sell for at home, which of the following is true?
a. An embargo has been established. b. A quota has been established. c. The manufacturer is engaged in dumping. d. There has been an improvement in the terms of trade. e. Tariffs have been reduced.
Refer to the graph shown. In 1975 U.S. President Gerald Ford instituted a large tax cut. At the same time, the Fed expanded the money supply. The effect of these policies on the AD curve is best shown as a movement from:
A. A to D. B. A to B. C. B to A. D. D to A.
Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and checkable deposits are the only form of money. A commercial bank receiving a new checkable deposit of $100 would be able to extend new loans in the amount of:
A. $10. B. $90. C. $100. D. $1,000.