Suppose the Total Output Curve Increases at an Increasing Rate

question 261

Multiple Choice

Suppose the total output curve increases at an increasing rate for workers 1-50, increases at a decreasing rate from workers 51-101, and decreases beyond 101 workers. We would know that

• A) marginal product is increasing from workers 1-50 and then becomes negative after worker 51.
• B) marginal product is increasing from workers 1-50, decreasing after 51 workers, and becomes negative after the 101st worker.
• C) marginal product is decreasing from workers 1-101, becoming negative at the 102nd worker.
• D) marginal product is increasing from workers 1-50, constant from workers 51 to 101, and is decreasing after that.

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Definitions:

Capital Cost Allowance (CCA)

Depreciation for tax purposes, not necessarily the same as depreciation under International Financial Reporting Standards; depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.

After-Tax Operating Income

The income a company generates from its operations after subtracting taxes.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the short-term.