The Law of Diminishing Returns Makes It Clear That as More

question 343

Multiple Choice

The law of diminishing returns makes it clear that as more a variable input is employed, in the ________ the marginal product of the variable input eventually will ________.

• A) short run; rise
• B) long run; rise
• C) short run; fall
• D) long run; fall

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Definitions:

Total Income

The sum of all earnings or revenues received by an individual or organization, including wages, salaries, investment returns, and other sources.

Growing Income Inequality

The increasing gap in the distribution of income among individuals or households within a society.

Flow of Earnings

Refers to the movement of profits or income generated by a business or investment over time.

Stock of Assets

Represents the total value of financial and physical assets owned by an individual, company, or country.