The Law of Diminishing Marginal Returns Is

question 40

Multiple Choice

The law of diminishing marginal returns is

• A)the same concept as economies of scale.
• B)another name for the law of diminishing marginal utility.
• C)important for long-run economic analysis.
• D)relevant to the production of goods, but not services.
• E)none of the above

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Definitions:

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation applied in the U.S. to determine the tax-deductible value of assets over time.

Marginal Tax Rate

The tax rate that applies to the last unit of currency of the taxpayer's income, influencing additional income's tax impact.

Net Cash Flows

Represents the amount of money that flows into and out of a business during a specific period, accounting for all income and expenses.

Straight-Line Basis

A method of calculating depreciation or amortization by evenly spreading the cost over the useful life of the asset.