The Principle of Diminishing Returns to Capital States That If

question 15

Multiple Choice

The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, then the greater the amount of capital in use the:

• A)less is produced.
• B)less production is wasted.
• C)the more an additional unit of capital adds to production.
• D)the less an additional unit of capital adds to production.

---

Definitions:

Dividend

A segment of a corporation's profits given out to its shareholders, typically as cash or more shares.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and equity at a specific point in time.

Dividend Controversy

Dividend controversy revolves around the debate on whether companies should distribute profits to shareholders as dividends or reinvest them in the business.

Stock Price

The cost of purchasing a share of a company’s stock, which fluctuates based on market conditions and the company's financial health.