If Increasing Quantities of a Variable Factor Are Applied to a Given

question 48

Multiple Choice

If increasing quantities of a variable factor are applied to a given quantity of fixed factors,then the law of diminishing returns tells us that

• A)the marginal product and the average product of the variable factor will eventually decrease.
• B)the marginal product will eventually decrease with constant average product.
• C)the average product will eventually decrease with constant marginal product.
• D)the average product will eventually decrease,but only if total product is held constant.
• E)total product will eventually begin to fall.

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Definitions:

Operating, Normal Business Activities

Transactions and events that directly affect the provision of goods or services to customers.

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A financial statement that details an organization's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Retained Earnings

The portion of a company's profits that are kept or retained rather than distributed to shareholders or used to pay off debt.