The Law of Diminishing Marginal Returns Explains Why _____

question 96

Multiple Choice

The law of diminishing marginal returns explains why _____

• A)monopolies have a guaranteed profit margin.
• B)short-run marginal cost and average cost curves are U-shaped.
• C)the production possibilities curve is bowed out.
• D)long-run supply curves are downward sloping.
• E)the total product curve is a straight line.

Understand the methods interest groups use to attract members and why certain incentives work.

Define interest groups and differentiate them from other political organizations.

Explain the challenges of interest group membership, particularly the free-rider problem.

Discuss how interest groups are considered public, ideological, or economic based on their goals.

---

Definitions:

November 45 Call

A type of option contract that gives the holder the right, but not the obligation, to buy a stock or another financial instrument at a specified price (in this case, $45) on or before November's expiration date.

Risk-Free Rate Of Return

The assumed rate of return on an investment that carries no risk, typically illustrated by the return on government securities.

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset.

Market Value

The total value of a company, measured through the market price of its outstanding shares.