The Fact That Isoquants Are Downward Sloping Indicates

question 83

Multiple Choice

The fact that isoquants are downward sloping indicates

• A)the diminishing marginal productivity of a variable factor.
• B)the diminishing marginal productivity of a fixed factor.
• C)that each factor input has a negative marginal productivity.
• D)a change in relative factor prices,with output held constant.
• E)that a reduction in the use of one factor requires an increase in the use of the other factor in order to keep output constant.

---

Definitions:

Unemployment Rate

The percentage of those in the labor force who are not working but are in search of employment.

Natural Rate

Often refers to the natural rate of unemployment, which is the level of unemployment consistent with a stable rate of inflation, not zero unemployment.

Unemployment

The situation in which individuals who are capable of working and are actively seeking work remain un-hired.

Money Growth

The increase in the amount of money in an economy over time.