Diminishing returns occur because
A. Of inefficiency in the production process.
B. A firm increases the amount of a variable input without changing a fixed input.
C. Of lower opportunity costs of the factors of production.
D. Of the use of inferior factors of production.
Answer: B
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The interest rate charged on a risk-free loan exceeds the rate on a risky loan
a. True b. False
Consider the relationship given by QCars = 100 + 4 × PCars - 2 × PSteel - 0.2 × PWorkers, where QCars is the quantity of cars supplied (in thousands), PCars is the price of cars (in thousands of dollars), PSteel is the price of steel, and PWorkers is the wage earned by autoworkers. If the price of steel is $10 per unit and the price of workers (the wage) is $20, at what price would there be 164,000 cars supplied?
A. $10,000 B. $16,000 C. $22,000 D. $41,000
Which of the following statements is correct?
A. Slope is the ratio of the vertical change (the rise or fall) to the horizontal change (the run). B. A direct relationship is one in which two variables change in the opposite direction. C. An inverse relationship is one in which two variables change in same directions. D. An independent relationship is one in which two variables are upward sloping.
Once a public good is produced, everyone
A. can consume a different amount and pay different prices for the product. B. consumes the same amount and everyone's willingness to pay is the same. C. consumes the same amount, but the willingness to pay will be different for different individuals. D. can consume a different amount depending on their willingness to buy the good.