Q 6

Diminishing marginal returns means that as you combine more units of a variable resource with a set of fixed resources:
A)the average physical product of the fixed inputs increases at an increasing rate.
B)the marginal physical product of the variable input decreases.
C)the total output decreases.
D)the marginal physical product of the variable input increases at a constant rate.
E)the marginal physical product of the variable input increases at a decreasing rate.

Q 7

If a firm is experiencing diminishing returns to a variable input, then:
A)it must be hiring less-productive units of the variable resource.
B)it must be experiencing diseconomies of scale.
C)the marginal physical product of the variable input must be decreasing.
D)the average physical product of the variable input must be decreasing.
E)its total product must be decreasing.

Q 8

When more and more units of a variable factor are combined with constant amount of a fixed factor, such that the variable factor becomes abundant compared to the fixed factor, the output will eventually:
A)increase at an increasing rate.
B)increase at a diminishing rate.
C)increase at a constant rate.
D)become constant.
E)fall to zero.