Refer to the above figure. The curve reflects
A. the law of increasing marginal product in labor.
B. the law of diminishing marginal product in capital.
C. the law of diminishing marginal product in labor.
D. the law of increasing marginal product in capital.
Answer: C
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Suppose Paul has chosen a combination of two goods, A and B, such that the marginal utility per dollar spent for good A (MUA/PA) is .6 and the marginal utility per dollar spent for good B (MUB/PB) is 1. To increase utility with the same amount of money, Paul should:
A. increase the number of B consumed and decrease the number of A consumed. B. increase the number of both A and B consumed. C. increase the number of A consumed and decrease the number of B consumed. D. do nothing; he cannot increase total utility.
Anna is expecting a child but has decided that she is not ready to be a mother. She chooses to sell her newborn to Bob and Sue, a couple who have been unable to conceive a child of their own but want one desperately. This is an example of a trade that:
A. should be permitted as long as each party enters into the agreement voluntarily. B. may benefit each party but may not be permitted in a society that believes selling babies is morally wrong. C. would never be permitted in any society. D. may benefit each party but cannot be considered efficient.
The United States temporarily operated outside the production possibilities frontier in
A. 1933. B. 1943. C. 1973. D. 1982.
The poor have demonstrated a marked ability to move out of poverty when economic opportunities improved
Indicate whether the statement is true or false