Diminishing Marginal Returns Occur Because

question 26

Multiple Choice

Diminishing marginal returns occur because

• A) hiring more employees means that each has less capital with which to work.
• B) it is more difficult to manage a firm as the size of the workforce and capital stock both grow.
• C) the best employees will always be hired first.
• D) hiring more employees means that they will subdivide tasks and therefore become more efficient.

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Definitions:

Door-to-Door Sales

The direct selling of goods or services to consumers at their homes or places of residence.

Abuses

The improper use or treatment of someone or something, often to unfairly or improperly gain benefit.

Cooling-Off Period

A statutorily defined period during which purchasers in door-to-door sales may change their minds and rescind a contract.

Bill of Exchange

A written order used in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date.