In a Competitive Labor Market, with One Variable Factor, the Supply

question 35

Multiple Choice

In a competitive labor market, with one variable factor, the supply of labor to the firm is:

• A) equal to the marginal expenditure curve.
• B) equal to the demand curve for labor.
• C) greater than the marginal expenditure curve.
• D) equal to the marginal revenue product curve.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or sales activities, such as materials and labor.

Utilization

The extent to which a resource, such as equipment or labor, is used for its intended purpose, often expressed as a percentage.

Efficiency

The ratio of the useful output to the total input in any system, reflecting how well resources are utilized without waste.