Diminishing Marginal Product of Labour Occurs When Adding Another Unit

question 168

Multiple Choice

Diminishing marginal product of labour occurs when adding another unit of labour

• A)decreases output.
• B)changes output by an amount smaller than the output added by the previous unit of labour.
• C)increases output by an amount larger than the output added by the previous unit of labour.
• D)decreases output by an amount smaller than the output added by the previous unit of labour.

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Definitions:

Purchases Returns

Goods returned by the buyer to the supplier due to defects, damage, or other reasons, which can reduce the total amount of purchases.

Retail Inventory Method

An accounting technique used in retail to estimate the ending inventory value based on the relationship between the cost and selling price of goods.

Cost-to-retail Ratio

A method used in inventory accounting that estimates the value of ending inventory by calculating the cost to retail price ratio.

Homogeneous Inventory

An inventory system where all items are similar in nature and use, making management and valuation processes more straightforward.