Use the figure below to answer the following question.
If the output level is Q2, then there will be
A. greater marginal benefits than marginal costs of the product.
B. minimum net consumer surplus.
C. allocative efficiency.
D. maximum deadweight losses.
Answer: C
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Diminishing marginal returns means that as you combine more units of a variable resource with a set of fixed resources:
a. the average physical product of the fixed inputs increases at an increasing rate. b. the marginal physical product of the variable input decreases. c. the total output decreases. d. the marginal physical product of the variable input increases at a constant rate. e. the marginal physical product of the variable input increases at a decreasing rate.
If the U.S. interest rate falls at the same time there is an increase in British real GDP, which of the following would happen in the market for British pounds?
a. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an indeterminate effect on the dollars per pound exchange rate. b. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an increase in the dollars per pound exchange rate. c. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and a decrease in the dollars per pound exchange rate. d. A leftward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an indeterminate effect on the dollars per pound exchange rate. e. Cannot be determined without additional information.