What is the difference between decreasing marginal returns and negative marginal returns?
What will be an ideal response?
Decreasing marginal returns occur when the marginal product of an additional worker is less than the marginal product of the previous worker. In this case, if the marginal product of the new worker is positive, the additional worker adds to total product, but adds less than did the previous worker. Negative marginal returns occur when an additional worker actually decreases total product.
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If the required reserve ratio is 4 percent, then $100 of reserves can support up to $2,500 of checkable deposits
a. True b. False Indicate whether the statement is true or false
If the United States could produce 1 ton of potatoes or 1 ton of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if: a. the United States specializes in potatoes because of its comparative advantage in producing potatoes. b. the United States specializes in wheat because of its absolute
advantage in producing wheat. c. the United States specializes in wheat because of its comparative advantage in producing wheat. d. there can be no mutual gains from trade.