Which of the Following Statements Best Expresses the Law of Diminishing

question 23

Multiple Choice

Which of the following statements best expresses the law of diminishing marginal returns?

• A)Because large-scale production allows the realization of increasing returns to scale, the costs of production vary directly with the level of output.
• B)Population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
• C)As successive amounts of one resource (labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline.
• D)The same percentage increase in all inputs will result in a lower percentage increase in total output.
• E)The same percentage increase in all inputs will result in a higher percentage increase in total output.

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Definitions:

Private Saving

The amount of income left after individuals have paid taxes and consumed goods and services, which can be used for investment or lending.

Public Saving

The portion of a government's budget that is left after accounting for all its spending, essentially the government budget surplus.

National Saving

The total amount of saving in a country, comprising both private and public saving.

Index Funds

Mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.