Which of the following statements is TRUE?
A) If average product equals marginal product, average product decreases.
B) If marginal product equals average product, average product is a maximum.
C) If marginal product equals average product, marginal product is a maximum.
D) If marginal product exceeds average product, marginal product increases.
B
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A combination of high inflation and recession, usually resulting from a supply shock, is known as
A) hyperinflation. B) disinflation. C) stagflation. D) depression.
The idea that poor people consume a higher percentage of their income than the rich is a logical conclusion drawn from
a. Keynes's absolute income hypothesis b. Duesenberry's relative income hypothesis c. Friedman's permanent income hypothesis d. the life-cycle hypothesis of consumption e. the consumption function