The law of diminishing marginal product shows the relationship
A. between inputs and outputs for a firm in the long run.
B. between short-run and long-run outputs of a firm.
C. between inputs and outputs for a firm in the short run.
D. between accounting and economic profits.
Answer: C
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Sudden and extensive changes in property rights make social cooperation less effective by
A) encouraging excessively conservative attitudes. B) inducing people to save for the future rather than spending now. C) making planning more difficult. D) reducing the power of government to manage the economy.
Suppose you are the manager of a large cardboard box industry. In the industry, there are 10 very large firms and 15 small firms. You are aware that the very large firms have a greater marginal benefit from industrywide advertising compared to the small firms. Which of the following payment plans is least likely to create discord across the participating firms?
A) Have each firm pay the exact same fee. B) Have each firm pay the average marginal benefit of industrywide advertising across all firms. C) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is greater than the fee paid by Group 2 firms. D) Place the very large firms into Group 1 and the small firms into Group 2 and require the firms in each respective group to pay the same amount with the firms in Group 1 paying a fee that is smaller than the fee paid by Group 2 firms.
When a market is in surplus, there is pressure for the price to move upward
a. True b. False Indicate whether the statement is true or false
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.