Diminishing Marginal Returns Implies That Firms

question 144

Multiple Choice

Diminishing marginal returns implies that firms

• A) require fewer and fewer workers to produce each additional unit of output.
• B) require more and more workers to produce each additional unit of output.
• C) get decreasing amounts of revenue for each unit of output they produce.
• D) get increasing amounts of revenue for each unit of output they produce.

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Definitions:

Machine-hour

A unit of measure representing the operation of machinery for one hour, often used as a basis for allocating manufacturing overhead costs.

Job Cost

A method used in accounting to track the costs associated with a specific job or order, capturing materials, labor, and overhead expenses.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to apply manufacturing overhead to products or job orders.

Direct Labor-hours

The total hours worked by employees who are directly involved in the manufacturing or production process of goods.