The situation pictured in Figure 6.3
A) is one of increasing marginal returns to labor.
B) is one of increasing marginal returns to capital.
C) is not consistent with diminishing marginal product of labor or capital.
D) shows constant returns to scale.
E) shows diminishing marginal products of labor and capital.
E
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How will the invisible hand move corn prices in response to:
a. a flood that destroys a great deal of the corn crop? b. a rise in the price of wheat (a substitute for corn)? c. a change in consumer tastes away from corn dogs toward hot dogs? d. an increase in the number of people with access to the corn market?
There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are
A) substitute goods. B) inferior goods. C) independent goods. D) complementary goods.