Which of the Following Is True of Fixed-Proportions Production

question 34

Multiple Choice

Which of the following is true of fixed-proportions production?

• A) The inputs used in production have constant marginal products.
• B) An increase in the price of an input will lead the firm to substitute away from it.
• C) The inputs used in production display diminishing marginal returns.
• D) The inputs used in production are perfect complements.
• E) The marginal cost of the inputs used in production is fixed.

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Definitions:

Pretax Profit

The earnings a company generates before taxes are deducted.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Dividend Payments

Cash payments made by a company to its shareholders, usually derived from the company's profits.

Financing Activities

Transactions related to raising capital, repaying investors, and restructuring company debt within a business's cash flow statement.