If Increasing Quantities of a Variable Factor Are Applied to a Given

question 48

Multiple Choice

If increasing quantities of a variable factor are applied to a given quantity of fixed factors,then the law of diminishing returns tells us that

• A)the marginal product and the average product of the variable factor will eventually decrease.
• B)the marginal product will eventually decrease with constant average product.
• C)the average product will eventually decrease with constant marginal product.
• D)the average product will eventually decrease,but only if total product is held constant.
• E)total product will eventually begin to fall.

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Definitions:

Moving Points

A term that could refer to changing positions or values in a data set, market analysis, or physical locations on a map, but generally not a standard key term.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.).

Trade

Conducting transactions involving the exchange, sale, or purchase of goods and services by or among people and countries.

Consuming Outside

The act of purchasing and enjoying goods or services outside one’s home, such as dining at restaurants or outdoor markets.