If There Are Diminishing Marginal Returns to Capital, Such as Postulated

question 44

Multiple Choice

If there are diminishing marginal returns to capital, such as postulated in economic production models, what is the marginal product of capital for low-income nations?

• A) Their marginal products of capital are lower than in high-income nations.
• B) Their marginal products of capital are higher than in high-income nations.
• C) Their marginal products of capital are equal to their marginal products of labor.
• D) Their marginal products of labor are increasing, causing labor migration.

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Definitions:

Fish-and-Water Effect

A phenomenon where individuals are unaware of the prevalent cultural or environmental conditions that influence their behavior, similar to how fish may not recognize they are in water.

Self-verification

The desire and tendency of individuals to seek confirmation of their self-concept, whether positive or negative, from the external world.

Conscientiousness

A personality trait characterized by organization, responsibility, and dependability.

Bedrooms

Rooms within a dwelling designed primarily for sleeping or resting.