Suppose That for a Given Firm, the Increase in Output

question 135

Multiple Choice

Suppose that for a given firm, the increase in output resulting from the last worker hired is less than the increase in output of the previous worker hired. This is an example of

• A) diminishing returns.
• B) constant returns.
• C) increasing return.
• D) capital deepening.

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Definitions:

Entrepreneurship Reflects

Describes the act of initiating, designing, and running a new business, often seen as a solution to economic needs or as an opportunity for innovation.

Market Power

The ability of a firm that is not a pure monopolist to earn persistently large profits, indicating that it has some monopoly power. Because the firm has few (or weak) competitors, it has a degree of freedom from vigorous competition.

Soviet Bloc

The group of communist states of Central and Eastern Europe, including the Soviet Union, that existed during the Cold War.

Capital Markets

Financial markets for buying and selling equity and debt instruments, facilitating the raising of capital by companies and governments.