Diminishing returns along a production function means that each additional hour of labor employed
A) produces a successively smaller additional amount of real GDP.
B) produces a successively larger additional amount of real GDP.
C) produces a constant additional amount of real GDP.
D) does not produce any additional real GDP.
E) forces the real wage rate to rise.
A
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The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) is
A) equal to one. B) greater than one. C) negative. D) less than one.
The above figure shows the market for college education in the United States. With no government intervention, the unregulated market equilibrium is ________ because education generates ________
A) efficient; positive external benefits B) inefficient; positive external benefits C) inefficient; positive external costs D) efficient; positive external costs E) inefficient; public goods