Is knowledge capital subject to the law of diminishing returns? Explain
What will be an ideal response?
The law of diminishing returns states that successive increases in capital result in successively smaller and smaller increases in output. Knowledge capital may not be subject to the same law of diminishing returns that physical capital is. In fact, knowledge capital may experience increasing returns because knowledge, once discovered, is available to everyone and is therefore more likely to generate new technologies and economic growth.
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Jasmine is willing to buy 40 pencils at 25 cents apiece. When the price is ten cents apiece, she is willing to buy 100 pencils. Which of the following statements could be true about Jasmine's demand for pencils?
a) She will buy 80 pencils at 15 cents apiece. b) She will buy 20 pencils and 20 cents apiece. c) She will buy 100 pencils at 5 cents apiece. d) None of these statements is likely to be true
A firm will avoid producing additional emissions whenever the fee is
A) less than the MSB. B) greater than the MSB. C) less than the MCA. D) greater than the MCA. E) equal to the distance between MSB and MCA.