In the Short Run, If the Marginal Product of Labor

question 43

Multiple Choice

In the short run, if the marginal product of labor is decreasing, then:

• A) marginal cost must be increasing.
• B) the marginal revenue of the firm must be decreasing.
• C) average total cost must be increasing.
• D) average variable cost must be decreasing.
• E) average total cost must be decreasing. the marginal revenue product of labor must be increasing.

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Definitions:

Recession

A decline in real GDP for two consecutive quarters.

Lowering Tax Rates

The act of reducing the percentage at which income or corporate profits are taxed, which can affect economic behaviors and government revenues.

Supply-siders

Economists who believe reducing barriers for people to produce (supply) goods and services, like lower taxes, will stimulate economic growth.

Curing Recessions

Efforts and policies aimed at stimulating economic recovery and ending periods of economic decline.