Transaction costs increase the economic value of an exchange.
Indicate whether the statement is true or false
QUESTION 2When more and more units of a variable factor are combined with constant amount of a fixed factor, such that the variable factor becomes abundant compared to the fixed factor, the output will eventually:
a. increase at an increasing rate.
b. increase at a diminishing rate.
c. increase at a constant rate.
d. become constant.
e. fall to zero.
QUESTION 3In a perfectly competitive market, marginal revenue is the same as the market price.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Which of the following is a nonrenewable source of energy?
a. Corn
b. Ethanol
c. Petroleum
d. Bagasse
e. Biomass
QUESTION 5Price tags reduce transaction costs in countries where people's time is more valuable.
Indicate whether the statement is true or false
QUESTION 6If a firm is experiencing diminishing returns to a variable input, then:
a. it must be hiring less-productive units of the variable resource.
b. it must be experiencing diseconomies of scale.
c. the marginal physical product of the variable input must be decreasing.
d. the average physical product of the variable input must be decreasing.
e. its total product must be decreasing.
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