The law of diminishing marginal returns
A) sets in because not all workers are equally productive.
B) applies only in the short run.
C) holds even when there are no fixed factors.
D) ultimately explains why production displays diseconomies of scale.
Answer: B
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Refer to Figure 6-5. The section of the demand curve labeled "A" represents
A) the inelastic section of the demand curve. B) the unit-elastic section of the demand curve. C) the perfectly elastic section of the demand curve. D) the elastic section of the demand curve.
If an individual receives in-kind transfers from the government in the form of food stamps, public housing, and so on, his money income is
A) less than his total income. B) greater than his total income. C) the same as his total income. D) equal to his in-kind income plus his wages.