When at Least One Factor of Production Is Fixed, Firms

question 92

Multiple Choice

When at least one factor of production is fixed, firms require more and more workers to produce each additional unit of output. This describes

• A) increasing marginal returns.
• B) diminishing marginal returns.
• C) learning by doing.
• D) short-run adjustments.

---

Definitions:

§179 Expense Election

A provision of the U.S. tax code that allows businesses to deduct the full purchase price of qualifying assets financed or purchased during the tax year.

Business Automobile

A vehicle primarily used for business activities and purposes, which may qualify for tax deductions related to its use.

Rental Property

Real estate that is owned with the intention of earning income from renting it out to tenants rather than personal use.

Standard Mileage Rate

The rate set by the IRS that taxpayers may use to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.