Diminishing returns occurs because
A) consumers don't buy enough of the products produced.
B) one of the inputs in the production process is fixed.
C) not enough people have jobs.
D) two people have not satisfied their self-interests.
B
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If input prices are constant, a firm with increasing returns to scale can expect
A) costs to double as output doubles. B) costs to more than double as output doubles. C) costs to go up less than double as output doubles. D) to hire more and more labor for a given amount of capital, since marginal product increases. E) to never reach the point where the marginal product of labor is equal to the wage.
Which of the following will most likely cause an increase (shift to the right) in both the long-run and short-run aggregate supply curves?
a. an increase in the national debt b. an increase in income tax rates c. a decrease in the economy's rate of investment and capital formation d. a technological improvement in robotics that substantially increases labor productivity