Diminishing Marginal Returns Occurs When

question 114

Multiple Choice

Diminishing marginal returns occurs when

• A) each additional unit of a variable factor adds less to total output than the previous unit, given constant quantities of other factors.
• B) each additional unit of a variable factor adds more to total output than the previous unit, given constant quantities of other factors.
• C) each additional unit of a variable factor diminishes total output, given constant quantities of other factors.
• D) each additional unit of a variable factor adds a constant amount to total output than the previous unit, given diminishing quantities of other factors.

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Definitions:

Effective-Interest Method

An accounting method to amortize the discount or premium on bonds payable or receivable over the bond's life, reflecting a constant rate of interest.

Market Rate

The current price or interest rate at which a good, service, or financial asset can be bought or sold in a competitive market.

Journal Entry

An accounting transaction entered into a ledger that denotes the financial activities of a company.

Statement of Cash Flows

A summary statement which tracks all cash inflows to a company from its regular business operations and funds received from investments, plus all cash outflows for paying business and investment costs within a certain period.