Given the Table Below,if Capital Is Fixed at One Unit,diminishing

question 59

Multiple Choice

Given the table below,if capital is fixed at one unit,diminishing returns begin with the $$\begin{array}{l}\quad\quad\quad\quad\quad \text { Units of Capital }\\\begin{array} { c c c c c } & & 1 & 2 & 3 \\ \text { Units } & 1 & 80 & 100 & 120 \\\text { of } & 2 & 180 & 220 & 260 \\\text { Labor } & 3 & 270 & 330 & 390 \\& 4 & 340 & 420 & 500 \\& 5 & 390 & 490 & 590 \\& 6 & 410 & 530 & 650\end{array}\end{array}$$ Amount of total output produced from various combinations of labor and capital.

• A)first unit of labor.
• B)second unit of labor.
• C)third unit of labor.
• D)fourth unit of labor.
• E)none of the above

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Definitions:

Direct Labour-Hours

The total hours worked directly on the production of goods, used to allocate labor costs accurately to products.

Variable Manufacturing

Costs that vary directly with the level of production output, such as materials and direct labor costs.

Fixed Manufacturing

Costs associated with the manufacturing process that do not vary with production volume, such as rent, depreciation, and salaries of permanent staff.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset over time.