The Law of Diminishing Returns Describes the

question 51

Multiple Choice

The law of diminishing returns describes the

• A)relationship between total costs and total revenues.
• B)profit-maximizing position of a firm.
• C)relationship between resource inputs and product outputs in the short run.
• D)relationship between resource inputs and product outputs in the long run.

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Definitions:

Historic Rate

The exchange rate used to convert foreign currency transactions to the reporting currency at the date of the transaction, for accounting purposes.

Income Statement Items

Elements found in the income statement, including revenues, expenses, gains, and losses, which together determine the net income of a company.

Average Rate

The mean amount at which something can be bought or sold, calculated over a specified period or under certain conditions.

Functional Currency

The primary currency used by a business or unit in its financial statements, reflecting the main economic environment in which it operates.