Diminishing Marginal Returns Occur When

question 276

Multiple Choice

Diminishing marginal returns occur when:

• A)each additional unit of a variable factor adds more to total output than the previous unit.
• B)each additional unit of a variable factor adds less to total output than the previous unit.
• C)the marginal product of a variable factor is increasing at a decreasing rate.
• D)total product decreases.

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Definitions:

Subsidiary

A company controlled by another company, often referred to as the parent company.

Fair Value

The likely receipts from offloading an asset or the expenditure to relocate a liability, in a systematic transaction at the market rate on the day of valuation.

Initial Value Method

An accounting method where investments are recorded at their acquisition cost without subsequent change except for impairments and certain adjustments.

Full-Accrual Totals

A method of accounting that records revenues when earned and expenses when incurred, regardless of when cash transactions occur.