The hypothesis that people believe the best indicator of the future is the recent past is known as:

Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 22 units, four laborers 24 units, and five laborers 25 units. Diminishing returns set in when the firm hires:

a. the first laborer. b. the second laborer. c. the third laborer. d. the fourth laborer. e. the fifth laborer.

Assume Joe invests a total of $10,000 in a company - $5,000 of which is his own money and $5,000 which he borrowed at a 10% interest rate. If the company's stock value decreases by 5% in one year at which time Joe sells his shares of the stock, what is Joe's rate of return on his investment?

a. ?5% b. ?10% c. ?20% d. ?30%