The Law of Diminishing Returns States That If Increasing Quantities

question 37

Multiple Choice

The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors,then

• A)the MP and the AP of the variable factor will eventually decrease.
• B)the AP will eventually decrease with constant MP.
• C)the MP will eventually decrease with constant AP.
• D)the AP will eventually decrease,but only if TP is held constant.
• E)TP will eventually begin to fall.

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Definitions:

Par Value

The nominal or face value of a stock or bond, as stated by the issuing corporation.

Large Stock Dividend

A distribution of a substantial number of shares to a company's shareholders, often used to conserve cash while still rewarding investors.

Market Value

Market value is the current price at which an asset or service can be bought or sold in the market.

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn reduces the price per share.