The Marginal Product of a Factor of Production

question 14

Multiple Choice

The marginal product of a factor of production

• A) is equal to the ratio of the amount that factor of production to the amount of output produced.
• B) is equal to the amount of additional output that can be produced with one additional unit of each factor input.
• C) is equal to the amount of additional output that can be produced with one additional unit of that factor input, holding constant the quantities of the other factor inputs.
• D) always exceeds the average product of that factor input, holding constant the quantities of the other factor inputs.
• E) is equal to the additional output that can be produced with an additional change in total factor productivity.

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Definitions:

Automatic Stabilizer

Economic strategies and initiatives aimed at balancing shifts in a country's economic performance without interference from governmental or policy-making bodies.

Supply-Side

Economic theory that emphasizes the importance of increasing supply (production of goods and services) as the key to economic growth, lower unemployment, and lower inflation.

Federal Budget Deficit

The shortfall in the federal government's budget when its expenditures surpass its revenues.

National Debt

The total amount of money that a country’s government has borrowed by issuing securities, usually through selling bonds.