If There Are Diminishing Returns to Capital,then

question 141

Multiple Choice

If there are diminishing returns to capital,then

• A)capital produces fewer goods as it ages.
• B)old ideas are not as useful as new ones.
• C)increases in the capital stock eventually decrease output.
• D)increases in the capital stock increase output by ever smaller amounts.

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Definitions:

Surplus

A situation where the quantity of a product or resource exceeds the quantity demanded or utilized.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting additional benefit to producers.

Tariff

A tariff is a tax imposed by a government on imported or exported goods, often used to protect domestic industries or to generate revenue.

Trade

The exchange of goods, services, or both, between parties, either within an economy or between economies.