What Does the Law of Diminishing Marginal Returns State

question 5

Multiple Choice

What does the law of diminishing marginal returns state?

• A) When all inputs to production are increased in equal proportions, output will eventually decrease.
• B) When one input is increased, with all other inputs unchanged, the marginal product of the input will eventually decline.
• C) When one input is held constant, and all other inputs are increased, output will eventually decrease.
• D) When one input is increased, and all other inputs are held constant, output will increase at an increasing rate.
• E) When all inputs to production are increased in equal proportions, the addition to output will increase at an increasing rate.

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Definitions:

Recording Process

The act of documenting financial transactions systematically in the books of accounts of a business.

Journal

An elaborate log that captures every financial transaction of an enterprise, initially entered prior to its transfer to the accounts within the general ledger.

Ledger

A comprehensive collection of accounts that records all financial transactions of a business, serving as the principal book for accounting.

Trial Balance

An accounting report that lists the balances of all ledger accounts to ensure that debits equal credits, used for internal checks.