Problem 1: The .... is the increase in output obtained by hiring an additional worker.
a. average product
b. total product
c. marginal product
d. marginal cost
Problem 2: The term "diminishing returns" refers to
a. falling interest rate that can be expected as one's investment in a single asset increases
b. reduction in profits caused by increasing output beyond the optimal point
c. decrease in total output due to overcrowding, when too much labor is used with too little land or capital
d. a decrease in the extra output due to the use of an additional unit of a variable input, when more and more of the variable input is used and all other things are held constant
Problem 3: If two firms are identical in all respects expect that one has more capital than another, the total product curve for the firm with more capital
a. must equal the total product curve for firm with less capital
b. will lie above the total product curve for the firm with more capital
c. will lie below the total product curve for the firm with more capital
d. will show no diminishing marginal returns