Diminishing Returns to an Input Occur

question 206

Multiple Choice

Diminishing returns to an input occur:

• A)when all inputs are fixed.
• B)when some inputs are fixed and some are variable.
• C)when all inputs are variable.
• D)only when there are no fixed inputs.

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Definitions:

Pre-Acquisition Profits

Earnings of a subsidiary before control was taken by the parent company; these are not included in the consolidated profit and loss of the parent company.

Dividend Paid

Refers to the portion of a company's earnings that is distributed to its shareholders as a return on their investment.

Subsidiary

A company that is completely or majority-owned by another company.

Fair Value

Fair value is the estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.