Isoquants are convex to the origin due to:
A) the law of diminishing marginal utility.
B) the assumption of the diminishing marginal productivity of each input.
C) the fact that as less capital is used, its marginal productivity falls.
D) the fact that as more labor is used, its marginal productivity rises.
B
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An increase in consumer confidence will tend to cause which of the following to occur?
A) a rightward shift in the IS curve B) a leftward shift in the IS curve C) an upward shift in the LM curve D) a downward shift in the LM curve
Suppose that the rest of the world experiences an economic boom causing an increase in foreign output (Y*). This increase in Y* will not cause which of the following to occur?
A) the domestic country's output to increase B) the domestic country's consumption to increase C) the domestic country's output to increase and its trade balance to worsen as imports increase D) all of the above E) none of the above