If a Firm Is Experiencing Diminishing Returns to Labor

question 1

Multiple Choice

If a firm is experiencing diminishing returns to labor,

• A)marginal product of labor must be decreasing.
• B)it must be producing in the long run.
• C)marginal cost must be decreasing.
• D)the firm must be experiencing diseconomies of scale.
• E)the firm is apparently hiring less-qualified units of labor.

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Definitions:

Negative Income Tax

A proposed system of social security that guarantees a minimum income to all, where those earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Income Subsidy

An income subsidy is a government-provided financial assistance program intended to boost an individual's income to a level sufficient for meeting basic living standards.

Negative Income Tax

A program where the government provides additional income to those who earn under a specific threshold, rather than collecting taxes from them.

Tax Liability

Tax liability is the total amount of tax that an individual or organization is legally obligated to pay to a taxing authority based on earnings, property ownership, or other taxable conditions.