Diminishing Marginal Returns Means That as You Combine More Units

question 80

Multiple Choice

Diminishing marginal returns means that as you combine more units of a variable resource with a set of fixed resources:

• A)the average physical product increases at an increasing rate.
• B)the marginal physical product decreases.
• C)the total production decreases.
• D)the marginal physical product becomes negative.
• E)the marginal physical product increases at a decreasing rate.

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Definitions:

Costs Of Quality

The total costs associated with preventing, detecting, and correcting defective work, divided into prevention costs, appraisal costs, and failure costs.

Unit-level Activities

Tasks or operations that vary directly with the number of units produced or services rendered.

Overhead Cost

Costs incurred from running a company that are not directly linked to any individual product or service.

External Financial Reports

External financial reports are documents prepared by a company, such as income statements and balance sheets, that provide financial information to parties outside of the company.