Jeremiah runs a bullfrog farm in Frogville, Oklahoma. Jeremiah notices that each additional worker he employs adds more to the total output than does the previous worker. Jeremiah must be
A) experiencing increasing marginal returns to labor.
B) producing at a point where the average product of labor decreases as more workers are employed.
C) producing at a point below his total product curve.
D) mistaken because the law of decreasing returns points out that it cannot be the case that the marginal product increases as more workers are employed.
E) producing at a point where the average product of labor exceeds the marginal product of labor.
A
You might also like to view...
Theories should be judged based upon how consistently and precisely they predict and how well they explain things
Indicate whether the statement is true or false
The CAMELS ratings are:
A. published once a quarter in banking journals issued by the Federal Reserve. B. not made public. C. made public monthly to the financial markets so people can judge the relative quality of banks. D. included in the annual report of publicly owned banks.
In order to hire additional laborers, a monopsony must
A) lower the supply of labor. B) raise the wage rate. C) advertise for the labor. D) do nothing.
Which of the following is TRUE?
A) Points along the aggregate supply curve show the equilibrium levels of output and prices that are consistent on the demand side of the economy. B) Points along the aggregate demand curve show the equilibrium levels of output and prices that are consistent on the supply side of the economy. C) Aggregate demand shows the levels of GDP and prices where expenditure decisions and production decisions match. D) Aggregate supply shows the levels of GDP and prices where expenditure decisions and production decisions match.