If Two Firms Are Identical in All Respects Except That

question 81

Multiple Choice

If two firms are identical in all respects except that one has more capital than another, the total product curve for the firm with more capital:

• A)must equal the total product curve for the firm with less capital.
• B)will lie above the total product curve for the firm with less capital.
• C)will lie below the total product curve for the firm with less capital.
• D)will show no diminishing marginal returns.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.

Confirmation Bias

The tendency to view events and people in ways that fit how we want and expect them to be.

Causal Attribution

The process by which individuals explain the causes of behavior and events, attributing them to internal dispositions or external situations.

Fundamental Attribution Error

The tendency for observers to overestimate personality or dispositional causes for someone else's behavior and underestimate situational influences.