Question:

Which of the following statements describes the presence of diminishing returns. Holding at least one factor constant …….

A.

The marginal product of a factor is positive and rising.

B.

The marginal product of a factor is positive but falling.

C.

The marginal product of a factor is falling and negative.

D.

The marginal product of a factor is constant.

Answer» b. The marginal product of a factor is positive but falling.

Question:

A major critique of advertising is that

A.

it provides information to consumers that they would be better off without

B.

it manipulates people\s tastes, leading people to make bad choices

C.

it promotes excessive competition among firms in the industry

D.

it is usually linked to promotions, which undermine the market\s price

Answer» b. it manipulates people\s tastes, leading people to make bad choices

Question:

Average revenue curve under perfect competition is

A.

Upward sloping

B.

Downward sloping

C.

Horizontal straight line

D.

Vertical straight line

Answer» c. Horizontal straight line