The law of diminishing marginal product holds so long as the input is not a Giffen good.
Answer the following statement true (T) or false (F)
False
Rationale: There are no such things as "Giffen goods" for inputs -- because there are no such things as income or wealth effects in the producer model.
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Market failure occurs when
A) the price system fails to generate an efficient allocation of resources. B) the price system fails to generate an equal distribution of income. C) the price system fails to generate an equal distribution of wealth. D) the price system allows consumers to make their own decisions.
Compared with a perfectly competitive firm facing the same costs, long-run equilibrium for a monopolistically competitive firm will result in
A. a higher price and less output. B. a lower price and less output. C. a higher price and greater output. D. a lower price and greater output.
Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. This would be expected to cause the price of Japanese goods in the U.S. economy to
A. decrease. B. change in a manner that cannot be determined without additional information. C. remain the same since domestic demand remains the same. D. increase.
Monetarists believe that an increase in the money supply will lead to
a. a decrease in investment b. an increase in the interest rate c. a decrease in the price level d. an increase in nominal GDP e. an increase in real GDP