What Happens to the Marginal Revenue Product Curve of a Factor

question 57

Multiple Choice

What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?

• A) It shifts to the left, because its marginal product decreases.
• B) It shifts to the left, because its marginal product increases.
• C) It shifts to the right, because its marginal product decreases.
• D) It shifts to the right, because its marginal product increases.

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Definitions:

Calendar Year

An accounting period that extends from January 1 to December 31.

Annual Interest Accrual

The amount of interest that accumulates on a financial obligation over the course of a year.

Bonds Issuance

The process of offering bonds to investors as a means of raising capital for the issuer.

Face Amount

The nominal or dollar value stated on a financial instrument or security, such as the original amount on a bond or insurance policy.