The Term Diminishing Returns Refers to A

question 140

Multiple Choice

The term diminishing returns refers to a:

• 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 the firm hiring uneducated workers.
• D)decrease in the extra output due to the use of an additional unit of a variable input when all other inputs are held constant.

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Definitions:

Production Data

Production data refers to quantitative information related to the amount, type, and efficiency of output produced by a company, industry, or economy over a specific period.

Opportunity Cost

is the value of the next best alternative forgone as a result of making a particular choice, highlighting the trade-offs in decision-making.

Absolute Advantage

The ability of a country or individual to produce a good or service more efficiently than others, using fewer resources.

Terms Of Trade

How much of one good exchanges for a unit of another good.