Multiple Choice Answers
1- D- (too little of a good and charges too high a price) This is because in order to maximize profits, a firm will under-produce to increase demand and raze the prices in order to capitalize on the increased demand
2- E- (diminishing returns) This is because as more people are hired and production and the need for materials increases, a firm will end up paying more but making; this leads to an eventual decrease in revenue.
3- A- (Marginal Product) As labor becomes more common in a firm, the amount of product, per worker, decreases.
2- E- (diminishing returns) This is because as more people are hired and production and the need for materials increases, a firm will end up paying more but making; this leads to an eventual decrease in revenue.
3- A- (Marginal Product) As labor becomes more common in a firm, the amount of product, per worker, decreases.
