The law of diminishing marginal product
A. holds in the short run and the long run because as you increase the amount of variable inputs eventually the increases in output will decrease.
B. holds in the short and long run because of economies to scale.
C. does not hold in the short run because of fixed costs.
D. does not hold in the long run because there are no fixed inputs in the long run.
Answer: D
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Which of the following provides the best explanation of why low-income countries generally remain poor?
a. Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange. b. They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. c. They are poorly endowed with natural resources, which are essential for long-term rapid growth. d. When the average income level is low, workers have little incentive to earn higher incomes.
Consumption spending that is independent of the level of income is known as
a. marginal consumption b. transitory consumption c. permanent consumption d. relative consumption e. autonomous consumption
You are considering buying a share of stock in Company ABC. At the end of years 1, 2, and 3 the stock will pay you a dividend of $10 . In addition, at the end of the third year you expect to sell the share of stock for $200 . If the interest rate is 5%, how much is the share of ABC stock worth to you today?
a. $200 b. $210 c. $220 d. $230
When there are fewer substitutes for a product, the ________ for the product is ________.
A. demand; more price elastic B. income elasticity; greater C. income elasticity; smaller D. demand; less price elastic