Use the Following Graph to Answer the Following Questions

question 145

Multiple Choice

Use the following graph to answer the following questions.

-If capital is increasing,then

• A) the production function will shift upward.
• B) the production function will shift downward.
• C) there is an upward movement along the production function.
• D) there is a downward movement along the production function.
• E) there is an upward shift of the production function and an upward movement along the production function.

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Definitions:

Minimum Required Rate of Return

The minimum return on an investment that is deemed acceptable, based on the risk tolerance of an investor or a company.

Variable Cost per Unit

The cost associated with producing one unit of a product, which varies with the level of production or sales volume.

Annual Fixed Costs

The total fixed costs a company incurs over a year, which do not vary with the level of production or sales.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing net profits by the cost of the investment.