The point where diminishing marginal returns has begun to affect production is best characterized by the point where the:
A. marginal product curve begins to be negatively sloped.
B. total product curve flattens out.
C. average product curve begins to be negatively sloped.
D. marginal product curve equals the average product curve.
Answer: A
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Which of the following is true?
A) If consumption of a good gives rise to a positive externality, it can be internalized by taxing the producers of the good. B) If production of a good gives rise to a negative externality, it can be internalized by taxing the producers of the good. C) If production of a good gives rise to a positive externality, it can be internalized by taxing the consumers of the good. D) If consumption of a good gives rise to a negative externality, it can be internalized by subsidizing the purchase of the good.
Suppose the expected price level increases. Which curves in the aggregate demand and aggregate supply model would be affected, and which way would they shift?