Exhibit 7-13 the Total Product of Labor

question 173

Multiple Choice

Exhibit 7-13 The Total Product of Labor
-Given the information in Exhibit 7-13, what is the marginal product of the third unit of labor?

• A) slightly less than 2 units of output but more than 1.5 units of output
• B) less than the marginal product of the second unit of labor
• C) more than the marginal product of the second unit of labor
• D) more than the marginal product of the fourth unit of labor
• E) cannot be determined from the graph of total product

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Definitions:

Double-Declining-Balance Method

A depreciation technique that accelerates the rate at which an asset loses value, doubling the rate of the straight-line depreciation method.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation to each year of the asset's useful life.

Depreciation

The planned distribution of the costs associated with a tangible asset over its usage period.

Units-of-Activity Method

A depreciation method that allocates a fixed asset's cost based on its usage, activities, or units of production, reflecting wear and tear more accurately.