Question

6. Scenario: Selma runs a pastry shop. The following table shows the total number of cupcakes...

6. Scenario: Selma runs a pastry shop. The following table shows the total number of cupcakes produced as a function of the number of hours of labor put into making them.

Hours of Labor Cupcakes
0 0
1 10
2 25
3 35
4 44
5 52
6 58


Refer to the scenario above. At which hour of labor does Diminishing (Marginal) Returns first start?

a. 2nd

b. 6th

c. 3rd

d. 4th

7. Specialization is the result of ________.

a. increased demand for a firm's commodity

b. paying higher wages to experienced workers

c. hiring experienced workers

d. workers developing a certain skill set

8. The Law of Diminishing Returns states that ________.

a. successive increases in product prices lead to a fall in revenue

b. successive increases in inputs eventually lead to less additional output when one of the inputs is fixed

c. the demand for a good decreases as the price of the good increases, all other things remaining constant

d. the net benefits of a perfectly competitive firm decrease as more firms enter the market

9. If marginal cost is less than average total cost, ________.

a. average total cost must be increasing

b. average total cost must be decreasing

c. marginal cost must be increasing

d. output must be falling

0 0
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Answer #1

Ans6) the correct option is c. 3rd

Ans7) the correct option is d. workers developing a certain skill set

Ans8) the correct option is b. successive increases in inputs eventually lead to less additional output when one of the inputs is fixed

Ans9) the correct option is b. average total cost must be decreasing

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