Question 1 The law of diminishing marginal returns implies: A. the more hours you spend studying economics the less you will know. B. your understanding of economics will be increased by decreasing your marginal study time. C. after a certain point the more hours you spend studying economics per day the less you will learn with each added hour. D. the more hours you spend studying economics per day the more you will learn with each added hour. Question 2 Which of the following cost curves will NOT shift downward if the price of a variable input decreases? A. Total cost B. Average cost C. Marginal cost D. Average fixed cost Question 3 Which economist believes that all profits are linked with uncertainty and risk? A. Frank Knight B. Joseph Schumpeter C. Karl Marx D. John Maynard Keynes Question 4 If there were no usury law the interest rate would be: A. 6%. B. 12%. C. 18%. D. 24%.
