Which of the Following Statements Regarding the Marginal Product Curve

question 51

Multiple Choice

Which of the following statements regarding the marginal product curve is FALSE?

• A) Increasing marginal returns occur only when the total product increases as the number of workers increases.
• B) Increasing marginal returns is due to greater efficiency from specialization in the production process.
• C) The law of diminishing returns applies in the short run.
• D) Along the marginal product curve, increasing marginal returns occur first and then diminishing marginal returns.

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Definitions:

Credit Terms

The conditions under which credit is extended by a lender to a borrower, including repayment timing, interest rate, and other stipulations.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume.