Diminishing Returns to Specialization Occurs When

question 59

Multiple Choice

Diminishing returns to specialization occurs when:

• A) each additional unit is produced with lesser number of laborers.
• B) a nation's gross domestic product declines for a few years.
• C) production possibility frontier appears as a rectangle.
• D) more units of resources are required to produce each additional unit.

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Definitions:

Straight-Line Method

A depreciation method where the same amount of depreciation expense is allocated evenly over the useful life of an asset.

Interest Method

A technique used in accounting and finance to calculate the interest income or expense on bonds and loans over their life.

Unamortized Premium

The portion of the bond premium that has not yet been amortized or allocated as an expense over the bond's life.

Straight-Line Method

A depreciation method that allocates an equal portion of the initial cost of an asset to each accounting period over its useful life.