If the Marginal Product of Labor for a Firm Decreases

question 38

Multiple Choice

If the marginal product of labor for a firm decreases as more workers are hired,we know that

• A) all workers are paid the same wage.
• B) the marginal cost of producing output is decreasing.
• C) the gains from specialization are exhausted.
• D) the marginal cost of producing output is constant.
• E) there are still gains from specialization left to be exploited.

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Definitions:

Bretton Woods Agreement

A 1944 agreement that established a new international monetary system, creating institutions like the International Monetary Fund (IMF) and the World Bank to ensure financial stability and promote economic cooperation.

Gold Standard

An economic setup where the worth of paper money or a country's currency is directly connected to the value of gold.

Fixed Exchange Rates

A government or central bank policy to maintain the country’s currency at a constant value relative to another currency or a benchmark.

Floating Exchange Rates

A currency valuation system where the value of a currency is determined by the foreign exchange market based on supply and demand relative to other currencies.