The marginal product of a factor of production
A) is equal to the ratio of the amount of that factor of production to the amount of output produced.
B) is equal to the amount of additional output that can be produced with one additional unit of each factor input.
C) is equal to the amount of additional output that can be produced with one additional unit of that factor input, holding constant the quantities of the other factor inputs.
D) always exceeds the average product of that factor input, holding constant the quantities of the other factor inputs.
C
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Any bank that uses deposits to make loans: a. operates on a 100 percent reserve system
b. operates on a fractional reserve system. c. does not operate on a reserve system. d. does not keep reserves in its vaults. e. charges an interest rate determined by the reserve ratio.
When Congressional decision makers chose not to raise taxes to fight the war on terrorism, they
A. eliminated the opportunity cost of war. B. exploited the fact that borrowed money has no opportunity cost. C. borrowed the money, moving the opportunity cost into higher interest rates and/or crowding out. D. printed all of the money required to fight the war on terrorism.