When a firm's marginal productivity of an input eventually declines as the quantity of input increases, then the production is experiencing

Cecilia's Café is in a competitive price-searcher market. Cecilia's is currently producing where average total cost is at its minimum, and Cecilia's is earning a positive economic profit. In the long run we would expect Cecilia's output to

a. decrease and average total cost to be higher. b. decrease and average total cost to be lower. c. remain unchanged as Cecilia's is doing the best it can. d. increase and average total costs to be lower.

Michael is a college student. He can either buy a textbook for $100 or save up for a road trip he wants to take during the summer. This illustrates the principle that

a. trade can make everyone better off. b. people face trade-offs. c. rational people think at the margin. d. people respond to incentives.