Over the range of diminishing marginal product, if the variable input to a firm is increased:
a. output will increase more than in proportion to the increase in the input.
b. output will increase less than in proportion to the increase in the input.
c. output will increase exactly in proportion to the increase in the input.
d. output will increase more than in proportion to the increase in the inputs at first, but it will eventually increase less than in proportion to the increase in the input.
Question 2
During a stock market bubble, the price/earnings P/E ratio:
a. hits high levels.
b. falls to zero.
c. becomes negative.
d. remains constant.
e. declines to a very low level.
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