Suppose 30 Employee-Hours Can Produce 50 Units of Output

question 18

Multiple Choice

Suppose 30 employee-hours can produce 50 units of output. Assuming the law of diminishing marginal returns is present, to produce 100 units of output would require:

• A)an additional 30 employee-hours.
• B)more than 30 additional employee-hours.
• C)a total of 60 or fewer employee-hours.
• D)fewer than 30 additional employee-hours.

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Definitions:

Amortization

The process of spreading out the cost of an intangible asset over its useful life or the repayment of loan principal over time.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflected in its income statement.

Contractual Interest Rate

The agreed-upon rate of interest to be paid on loans or bonds, specified within a contract.

Annual Rate

A yearly interest rate that accounts for compounding over a 12-month period.