Answer the following statements true (T) or false (F)
1. The production function relates outputs to inputs.
2. The marginal product is the increase in output per additional unit of input.
3. The marginal product decreases, reaches a minimum, and then rises as output increases.
4. As long as the marginal product is falling, the average product falls.
5. The average product decreases any time the marginal product is decreased.
1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. FALSE
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Political freedom can sometimes moderately reduce economic growth because
A) campaign contributions rob the economy of investment. B) special interest groups may gain at the expense of the overall economy. C) most jobs are in unions that are politically connected. D) none of the above.
According to Revealed Preferences, if a Consumer chooses a more expensive bundle of goods over a cheaper bundle of goods, we can conclude
A) the consumer prefers the more expensive bundle of goods. B) the consumer is behaving irrationally. C) the consumer is unaware of the cheaper bundle of goods. D) the consumer has convex preferences.