All Else Equal,if There Are Diminishing Returns and Constant Returns

question 75

Multiple Choice

All else equal,if there are diminishing returns and constant returns to scale,then what happens to productivity if capital and labor both increase but capital increases by more?

• A)Productivity will definitely fall.
• B)Productivity will definitely be unchanged.
• C)Productivity will definitely rise.
• D)None of the above are necessarily correct.

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Definitions:

Dividend Payout Ratio

A financial metric that shows the portion of a company's earnings paid out to shareholders as dividends.

Return on Assets

A financial ratio indicating how effectively a company is using its assets to generate profit.

Earnings Per Share

Earnings per share (EPS) is a financial metric that divides a company's profit available to common shareholders by the average outstanding shares, indicating the amount of money shareholders would receive for each share owned if all profits were distributed.

Earnings Per Share

A financial ratio that measures the amount of net income earned per share of stock outstanding.