A Negative Value for the Marginal Physical Product Would Indicate

question 366

Multiple Choice

A negative value for the marginal physical product would indicate that

• A) the company has not yet reached the point of saturation.
• B) total output increased by a significant amount.
• C) total output decreased when the extra unit of the variable input was added.
• D) total output increased, but the increase was very small.

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Definitions:

Income Elasticity Coefficient

A measure indicating how much the quantity demanded of a good responds to change in consumer income.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in successive quarters.

Income Elasticity

A measure of how much the demand for a product or service changes in response to changes in consumer income.

Inferior Good

A type of good for which demand decreases as the income of individuals increases, opposite to normal goods.