The Construct of a Representative Firm Is Most Helpful in Describing

question 28

Multiple Choice

The construct of a representative firm is most helpful in describing the behaviour of all of the firms in the economy when

• A)the marginal product of labour is decreasing in the amount of labour input.
• B)there are constant returns to scale.
• C)there are decreasing returns to scale.
• D)the marginal product of labour is increasing in the amount of labour input.
• E)there are increasing returns to scale.

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Definitions:

Civil War

A war between citizens of the same country.

American Federalism

A system of government in which power is divided between a national (federal) government and various state governments.

Allocation of Responsibilities

The process of distributing tasks, duties, and powers among different levels of government or among departments within an organization.

Dual Federalism

A political theory wherein state and national governments are seen as distinct entities providing separate services, limiting the power of the national government.