Which of the Following Statements Is TRUE

question 108

Multiple Choice

Which of the following statements is TRUE?

• A) When marginal product is less than average product, average product is increasing.
• B) When marginal product is less than average product, average product is decreasing.
• C) When marginal product is falling, average product is decreasing.
• D) When marginal product is rising, average product is decreasing.

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Definitions:

Strategic Behavior

Self-interested economic actions that take into account the expected reactions of others.

Dominant Strategy

A strategy that always results in the highest payoff for a player, regardless of the opponents' actions.

Nash Equilibrium

The situation that occurs in some simultaneous games wherein every player is playing his or her dominant strategy at the same time and thus no player has any reason to change behavior.

Repeated Games

A strategic situation in which the same game (a set of strategies and payoffs) is played multiple times, allowing for strategy evolution over time.