The Property of Diminishing Marginal Product Means That, After a Point

question 149

Multiple Choice

The property of diminishing marginal product means that, after a point, when additional quantities of:

• A)a factor are added, output diminishes.
• B)both labor and capital are added, output diminishes.
• C)both labor and capital are added, the marginal product of labor diminishes.
• D)a factor are added when another factor remains fixed, the marginal product of that factor diminishes.

---

Definitions:

Incidentals

Minor or secondary expenses or costs that may occur in addition to the primary expenses.

Cash Burn

The rate at which a company spends its capital to finance overhead before generating positive cash flow from operations.

Cash Equivalents

Short-term, highly liquid investments with maturities of three months or less at the time of acquisition, easily convertible to known amounts of cash.

Monthly Cash Expenses

The total amount of money spent by a business in cash within a month for operational and administrative purposes.