Figure 7-17 -Which of the Following Statements Must Be True When a Be

question 178

Multiple Choice

Figure 7-17

-Which of the following statements must be true when a firm makes choices that put it at point A in Figure 7-17?

• A)The firm is minimizing its cost of producing 100 units of output.
• B)The ratio of the marginal physical products of labor and of land equals the ratio of the prices of labor and of land.
• C)The firm first decided how much output to produce and then decided how to produce it.
• D)All of the above are true.

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Definitions:

Shareholders' Equity

The net value of a company, calculated by subtracting total liabilities from total assets, which represents the owners' claim after debts have been settled.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, also known as "net profit" or "net earnings."

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's earnings paid out to shareholders in the form of dividends.

Capital Gains

Capital gains arise from the sale of an asset at a price higher than its purchase price, resulting in a profit.