Which of the Following Statements Is True

question 38

Multiple Choice

Which of the following statements is true?

• A) The law of diminishing returns states that beyond some point the marginal product of a variable resource continues to rise.
• B) The marginal product is the change in total output by adding one additional unit of a fixed input.
• C) Fixed costs are costs which vary with the output level.
• D) When marginal productivity of a variable input is falling then marginal costs of production must be rising.
• E) When marginal cost is below average cost, average cost rises; when marginal cost is above average cost, average cost falls.

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Definitions:

Deductible

A cost that can be deducted from total income to lower the taxable income amount.

Charitable Contribution Deduction

A tax deduction that allows taxpayers to deduct donations made to qualifying charitable organizations from their taxable income.

Itemize Deductions

To list allowable expenses that can be subtracted from adjusted gross income to reduce taxable income, rather than taking a standard deduction.

Taxpayers

Individuals or entities that are required to pay taxes to a federal, state, or local government.