The law of diminishing returns states that as more workers are hired, beyond some point,
a. total output will fall
b. total cost will fall
c. marginal physical product will fall
d. total cost will rise
e. total output will rise
C
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About ____ of the world's population subsists on no more than $2 a day.
A. one tenth. B. one quarter. C. one third. D. one half.
Refer to the following graph.
The marginal utility curve associated with this total utility curve is:
A. a flat line with a slope of zero. B. a downward-sloping curve. C. an upward-sloping curve. D. indeterminate.
In the short run, why would a firm in a perfectly competitive market shut down production if the prevailing market price falls below the lowest possible average variable cost?
A. At that point (economic) profit is zero. B. Below that point average revenue becomes less than marginal revenue. C. Below that point marginal revenue becomes insufficient to pay for avoidable average variable cost. D. Below that point other firms with similar cost will find it profitable to enter the market and take away demand from the existing firms.
The infant industry argument has a normative economic basis because
A. clearly, all industries need to be protected. B. political corruption is the only deciding factor. C. protected industries are selected on a factual basis. D. the government must decide which industries should be protected.