Which of the following is true at the point where diminishing returns set in?
a. Marginal product is at a minimum and marginal cost at a maximum.
b. Both marginal product and marginal cost are at a minimum.
c. Both marginal product and marginal cost are at a maximum.
d. Marginal product is at a maximum and marginal cost at a minimum.
d
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An economic consultant recently reported to Sam Snerd that the cross-price elasticity between his product and another firm's scooters is 4.5 . From this information Sam can conclude that
a. his firm's market is smaller b. his firm is a monopolist c. his firm's product has few substitutes d. there is at least one other firm in his relevant market e. scooters are complimentary to his firm's product
The input-substitution effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product. B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product. C. make labor less expensive as an input, leading firms to switch to labor as an input. D. make labor more expensive as an input, leading firms to switch to other inputs.