9.

What will be the outcome of a business continually hiring workers without changing any other resources?

a. Output will increase at a constant rate with the addition of employees.

b. Wages will have to be decreased in order for the company to stay open.

c. The company will experience a lower opportunity cost with each employee addition.

d. Incentives will be high to increase output at a progressively-faster rate.

e. Productivity will eventually decrease because of the law of diminishing returns.

10.

The phrase "market failure" means that:

a. the market economy never works and is a complete failure.

b. some people are too stupid to work in the economy and so are called "market failures".

c. the government is always superior to allocation decisions made in the market.

d. sometimes individuals, following the dictates of the market, produce results that are harmful to the interests of society.

e. sometimes the government, following the dictates of Congress, produce results that are harmful to the market economy.