What Is True of Marginal Cost When Marginal Returns Are

question 27

Multiple Choice

What is true of marginal cost when marginal returns are decreasing?

• A)It is negative and increasing.
• B)It is negative and decreasing.
• C)It is positive and increasing.
• D)It is positive and decreasing.
• E)It is positive and has a constant slope.

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Definitions:

Marginal Productivity Theory

An economic theory stating that the amount of pay or wages a worker receives is directly related to their contribution to the output or productivity.

Income Disparities

The uneven distribution of income within a population, often leading to social and economic inequality.

Median Earnings

The middle value of earnings in a group, where half earn more and half earn less, often used as a standard of comparison.

Labor Market

The supply and demand for labor, where employers find employees and individuals find jobs.