A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?
A. the principle of opportunity cost
B. the principle of diminishing returns
C. the marginal principle
D. the spillover principle
Answer: B
Economics
You might also like to view...
Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in
A) potential GDP. B) the money wage rate. C) the buying power of money. D) the real interest rate. E) the price of domestic goods and services relative to foreign goods and services.
Economics
A market-day supply curve is
a. horizontal, summing individual supply curves b. vertical c. downward sloping d. upward sloping e. dependent on the market-day demand
Economics