Diminishing Marginal Returns Occur When

question 99

Multiple Choice

Diminishing marginal returns occur when:

• A)each additional unit of a variable factor adds more to total output than the previous unit.
• B)an additional variable factor adds less to total output than the previous unit.
• C)the marginal product of a variable factor is increasing but at a decreasing rate.
• D)total product decreases.

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Definitions:

Violates WARP

Refers to a situation where an individual's choice behavior contradicts the Weak Axiom of Revealed Preferences, suggesting inconsistency in their preferences.

Bundle

A combination of goods or services that are sold or consumed together.

Revealed Preferred

Another term for revealed preference, emphasizing the process of deducing preferences by observing actual choices under constraints.

Violates WARP

Deviating from the Weak Axiom of Revealed Preference, indicating inconsistencies in consumer choice under the assumption of rational behavior.