When Capital Is Included in the Production Function

question 64

Multiple Choice

When capital is included in the production function,

• A)less output is produced with the same amount of labor.
• B)more output is produced with the same amount of labor.
• C)diminishing returns to labor are eliminated.
• D)the production function exhibits increasing returns to labor.
• E)the production function exhibits constant returns to labor.

---

Definitions:

Net Income

The amount of money remaining from revenues after subtracting all costs, expenses, and taxes, indicating the profit earned.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Note Payable

A written agreement where one party promises to pay another a definite sum of money at a specified future date or on demand.

Current Assets

Assets likely to be converted into cash within a year, such as inventory, accounts receivable, and cash and cash equivalents.