The range in which there is diminishing marginal productivity starts at the point where:
a. marginal product reaches its maximum.
b. average product reaches its maximum.
c. total product reaches its maximum.
d. marginal product begins to decrease at an increasing rate.
QUESTION 2The capital market is a market in which only financial capital is acquired.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3According to the text, college students give higher evaluations to professors who are:
a. young and attractive.
b. experienced and highly qualified.
c. interactive and easily approachable.
d. strict and disciplined.
QUESTION 4When the budget line for two goods is just tangent to the highest achievable indifference curve, then _____.
a. the consumer is in equilibrium
b. the consumer should purchase more of the good represented on the horizontal axis
c. the consumer should purchase more of the good represented on the vertical axis
d. the consumer cannot afford the combination represented by the tangency point
e. the consumer should purchase less of both goods
QUESTION 5Which of the following is consistent with diminishing marginal product?
a. The more you study each day, the more you learn from each added hour of study.
b. The more you study each day, the less you know.
c. Beyond some point, each added hour studying each day adds less to what you know than the previous hour's study.
d. None of the above.
QUESTION 6If both demand for and supply of capital increase by equal amounts, then the equilibrium price of capital goes up, and the equilibrium quantity of capital increases.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Which of the following is a root cause behind competition inherent in every society?
a. Unlimited wants of the people
b. People's desire to acquire goods and services for free
c. Scarcity of goods and services
d. Genetic makeup of people
QUESTION 8Suppose a budget line is drawn with X on the horizontal axis and Y on the vertical axis. A decrease in the price of X will cause:
a. an increase in the vertical intercept and no change in the horizontal intercept.
b. a decrease in the vertical intercept and no change in the horizontal intercept.
c. an increase in the horizontal intercept and no change in the vertical intercept.
d. a decrease in the horizontal intercept and no change in the vertical intercept.
e. a parallel, rightward shift of the budget line.
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