Which of the Following Statements Is True

question 105

Multiple Choice

Which of the following statements is true?

• A) The law of diminishing returns states that beyond some point the marginal product of a variable resource continues to rise.
• B) The marginal product is the change in total output by adding one additional unit of a fixed input.
• C) Fixed costs are costs which vary with the output level.
• D) When marginal productivity of a variable input is falling, then marginal costs of production must be rising.

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Definitions:

Equity Transaction

Transactions that affect the ownership interest of shareholders in a company, including issues, buybacks, and sale of shares.

Incremental Costs

Costs directly associated with the production of additional units of goods or services.

Net Of Tax

The amount remaining after the effect of taxes has been accounted for.

Contingent Asset

A possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.