econ3 - "If a variable input is added to some fixed...

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"If a variable input is added to some fixed input, beyond some point the resulting extra output will decline." This statement describes: Choose an Answer: A. economies and diseconomies of scale. B. X-inefficiency. C. the law of diminishing returns. D. the law of diminishing marginal utility. The principal-agent problem arises because: Choose an Answer: A. the agent wants to maximize the company's profit and stock prices while the owners want power and prestige. B. the owners want to maximize company's profit and stock prices while the agent wants power and prestige. C. the owners want expensive office building while the agent wants to maximize the Company's profit. D. The stock holders have unlimited liability in case of a loss while the agent does not. If a firm decides to produce no output in the short run, its costs will be: Choose an Answer: A. its marginal costs. B. its fixed plus its variable costs. C. its fixed costs. D. zero. The graph of a total product curve shows the: Choose an Answer: A. minimum level of output that can be produced by a quantity of a variable factor of production holding constant the quantity of other factors of production. B. minimum level of output that can be produced by a quantity of a fixed factor of production letting other factors of production vary. C. maximum level of output that can be produced by a quantity of a fixed factor of production letting other factors of production vary. D. maximum level of output that can be produced by a quantity of a variable factor of production holding constant the quantity of other factors of production. Which of the following statements concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?
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Choose an Answer: A. AP continues to rise so long as TP is rising. B. AP reaches a maximum before TP reaches a maximum.
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This note was uploaded on 10/29/2009 for the course ECONOMICS 111 taught by Professor 111 during the Spring '09 term at University of Saskatchewan- Management Area.

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econ3 - "If a variable input is added to some fixed...

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