Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because
A) less efficient and less productive workers are hired.
B) adding more workers exhausts the possible gains from specialization.
C) the entrepreneur does not know how to manage more workers.
D) each worker will produce more than the worker previously hired.
E) the plant becomes less specialized.
B
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If the market clearing price of computer tablets falls from $400 to $300, and the market clearing output decreases from 5 million to 4 million units,
A) demand decreased and supply remained unchanged. B) supply increased and demand remained unchanged. C) demand increased and supply remained unchanged. D) supply decreased and demand remained unchanged.
In a closed economy, a decrease in the money supply will
A) shift the aggregate demand schedule to the left. B) shift the aggregate supply schedule to the right. C) shift the IS curve to the left. D) shift the LM curve to the right.