Author Question: According to the law of diminishing marginal product, if all the inputs to a firm are increased in ... (Read 80 times)

hubes95 · **on:** Jun 30, 2018

According to the law of diminishing marginal product, if all the inputs to a firm are increased in equal proportions,
a. output will increase more than in proportion to the increase in the inputs.
b. output will increase less than in proportion to the increase in the inputs.
c. output will increase exactly in proportion to the increase in the inputs.
d. The law of diminishing returns says nothing about what will happen to output when all inputs are increased in equal proportions.

Question 2

Which of the following factors led to the housing bubble in the U.S. in 2006?
a. Increased amount of lending to subprime borrowers
b. Decreased money supply by Federal Reserve
c. Future expectation about downward movement of prices of the houses
d. Federal Reserve raised the market rate of interest
e. Increase in the supply of houses