In order for the law of diminishing returns to be present, we must have:
a. at least one factor of production to be fixed.
b. output decreasing as more laborers are hired.
c. the price of labor increasing as more workers are hired.
d. simultaneous changes in labor and capital.
e. double the output when labor input is doubled.
Question 2
A rise in the price level will:
a. cause an upward movement along the aggregate demand curve.
b. cause a downward movement along the aggregate demand curve.
c. cause a leftward shift of the aggregate demand curve.
d. cause a rightward shift of the aggregate demand curve.
e. have no impact on the aggregate demand curve.
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