Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 22 ...

Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 22 units, four laborers 24 units, and five laborers 25 units. Diminishing returns set in when the firm hires:
 a. the first laborer.
  b. the second laborer.
  c. the third laborer.
  d. the fourth laborer.
  e. the fifth laborer.

QUESTION 2

It is relatively easy for firms to enter and exit a perfectly competitive market.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

When does a resource earn only economic rent?
 a. When the supply curve of the resource is relatively elastic
  b. When the supply curve of the resource is horizontal
  c. When the supply curve of the resource is vertical
  d. When the supply curve of the resource is relatively inelastic
  e. When the supply curve of the resource is backward bending

QUESTION 4

Why do economists sometimes treat decision makers as boundedly rational?

QUESTION 5

As I add more workers to the factory line, the additional output produced by each additional worker seems to decline. Eventually, the workers just get in each others' way.. This statement by a factory supervisor refers to the law of:
 a. comparative advantage.
  b. demand.
  c. supply.
  d. increasing returns to scale.
  e. diminishing marginal returns.

QUESTION 6

Perfect competition is characterized by a large number of buyers and sellers with identical products and no significant barriers to entry.
 a. True
  b. False
  Indicate whether the statement is true or false