According to the Law of Diminishing Returns, an Additional Unit

question 192

Multiple Choice

According to the law of diminishing returns, an additional unit of

• A) capital produces more output than an additional unit of labor.
• B) labor decreases output.
• C) labor produces more output than the previous unit.
• D) labor produces less output than the previous unit.

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Definitions:

Direct Method

A cash flow statement preparation approach that lists major payments and receipts of cash from operational activities directly.

Indirect Method

An approach used in cash flow statements where net income is adjusted for non-cash transactions, deferred revenues, and expenses to calculate cash flow from operating activities.

Indirect Approach

A method used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Noncash Charges

Expenses reported on an income statement that do not involve actual cash flow, such as depreciation, amortization, and stock-based compensation.