As long as ________ and ________ are low enough, foreign direct investment can be used to reduce total costs by locating different stages of overall production in different countries.

The law of decreasing returns states that as a firm uses more of a

A) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. B) variable input, total output will increase indefinitely. C) variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases. D) variable input, output will begin to fall immediately. E) fixed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease.

Explain the concept of liquidated damages with an example