Which of the following is an implication of the law of diminishing returns?
a. Total output will decline as more workers are hired.
b. In the long run, average total cost will eventually decline as output is expanded.
c. In the short run, expansion of output will eventually lead to increases in marginal cost and average total cost.
d. A doubling of all inputs will lead to more than a doubling of output.
C
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Everything else held constant, if the expected return on U.S. Treasury bonds falls from 8 to 7 percent and the expected return on corporate bonds falls from 10 to 8 percent, then the expected return of corporate bonds ________ relative to U.S
Treasury bonds and the demand for corporate bonds ________. A) rises; rises B) rises; falls C) falls; rises D) falls; falls
In discussing discrimination and the wage differences that exist between men and women and between blacks and whites, it has been said that "the disease is political even if the symptom is economic." What does this mean?
a. Wage differences persist because the political system has failed to enact laws to equalize wages among all groups. b. Wage differences exist because of past discrimination on the part of political bodies such as city councils and school boards. c. Wage differences exist because of the differences in the political views of the different groups. d. Wage differences exist because the political system is biased against paying compensating differentials.
Would we expect the "average" person to take more time to learn about the car he or she is considering purchasing or about the issues in the upcoming U.S. Senate race in his or her state?
A) The Senate race, because it is critical that we elect the right people to government. B) The car, but there is no rational reason for this. C) The Senate race, because the person who is elected senator today may become president tomorrow. D) The car, because a mistake here can potentially cause him or her more harm on a day-to-day basis; in addition, a person is unlikely to be able to determine the outcome of a Senate race.
The substitution effect is a trade-off between ___________ and _________________.
Fill in the blank(s) with the appropriate word(s).