Refer to the Following:
Amount of Total Output Produced from Various

question 36

Multiple Choice

Refer to the following:
Amount of total output produced from various combinations of labor and capital.

$\begin{array}{cccc} &\text { Units of Capital }\\&& 1 & 2 & 3 \\\hline &1 & 80 & 100 & 120 \\\text {Units }&2 & 180 & 220 & 260 \\\text {of }&3 & 270 & 330 & 390 \\\text {Labor }&4 & 340 & 420 & 500 \\&5 & 390 & 490 & 590 \\&6 & 410 & 530 & 650\end{array}$
-If capital is fixed at one unit, diminishing returns begin with the

• 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:

Return On Investment

A metric for assessing how well an investment is doing by comparing the net profit to the investment's initial cost.

Direct Expenses

Expenses directly linked to the manufacturing of particular products or services.

Sales

Sales involve the exchange of a product or service for money or its equivalent, constituting a fundamental activity of commercial enterprises to generate revenue.

Operating Departments

These are divisions within a business that are directly involved in carrying out the operations central to the business's purpose.