A Cubic Specification for a Short-Run Production Function Is Appropriate $\text { U }$

question 53

Multiple Choice

A cubic specification for a short-run production function is appropriate when the scatter diagram indicates

• A)an S-shaped total product curve.
• B)marginal product of labor falls throughout the range of labor usage.
• C)total product is decreasing throughout the range of labor usage.
• D)an S-shaped marginal product of labor curve.
• E)a \(\text { U }\) -shaped marginal product of labor curve (MP first falls and then rises as labor usage increases.

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Definitions:

Profit Margin

A financial metric that measures the extent to which a company or a business activity makes money, expressed as a percentage of sales revenues.

Debt-Equity Ratio

The ratio that evaluates the equity-versus-debt financing approach for company assets.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.