The law of diminishing returns describes the:
A. relationship between total costs and total revenues.
B. profit-maximizing position of a firm.
C. relationship between resource inputs and product outputs in the short run.
D. relationship between resource inputs and product outputs in the long run.
Answer: C
You might also like to view...
Which of the following is FALSE about issues/negotiations in the Doha Development agenda?
A) It is intended to deal with economic development issues and trade barriers facing developing countries that were not adequately addressed in the Uruguay Round. B) Many developing countries are upset with the levels of tariffs and other barriers that industrialized countries use to protect agriculture, clothing and textiles. C) Industrialized countries want developing countries to reduce their tariffs, which on average are higher than the rates of richer countries. D) Developing countries don't use tariffs, and they want higher income countries to follow their model.
Over the past year, output grew 4%, capital grew 2%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did productivity grow?
A) 2.0% B) 2.7% C) 3.0% D) 3.3%