A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production). The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is: A. correct because some inputs are fixed in the long run. B. incorrect because economies of scale are present. C. correct because marginal productivity must decrease in the short run. D. incorrect because all inputs are varied in the example.

S. you are changing planes in london for a flight to paris where you will connect with your flight to capetown. you are picking up reading material for the flight and are looking at the prices listed on the economist magazine which conveniently lists prices in several different global currencies. you note that the price in pounds is 2.40 pounds and the price in euros is 2 euros. the exchange rate for the dollar (your credit card was issued in the usa) is $1.59/pound and s1.3837/euro. should you buy reading materials now or wait until you're in paris?