A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?
A) the principle of opportunity cost B) the spillover principle
C) the principle of diminishing returns D) the marginal principle
C
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If there is capital flight from the United States, then the demand for loanable funds
a. and the supply of dollars in the foreign-exchange market shift right. b. and the supply of dollars in the foreign-exchange market shift left. c. shifts left while the supply of dollars in the foreign-exchange market shifts right. d. shifts right while the supply of dollars in the foreign-exchange market shifts left.
At a point on a production possibilities curve, opportunity cost of more capital goods today is
A) fewer capital goods in the future. B) fewer consumer goods in the future. C) fewer consumer goods today. D) more unemployed resources in the future.