In General,the Cost of an Input

question 33

Multiple Choice

In general,the cost of an input:

• A) decreases when you've reached the point of diminishing marginal product in your firm.
• B) stays the same when you've reached the point of diminishing marginal product in your firm.
• C) increases when you've reached the point of diminishing marginal product in your firm.
• D) is minimized when you've reached the point of diminishing marginal product in your firm.

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Definitions:

Depreciation Expense

An accounting method to allocate the cost of a tangible or physical asset over its useful life.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue; often called the bottom line.

Marginal Rate

The rate at which one additional unit of a variable is accounted for in the cost-benefit analysis, commonly used in the context of taxation and production.

Tax Rate

The fraction of income or profits that an individual or company needs to pay to the government as tax.