If a Firm Is Maximizing Profit and the Marginal Revenue

question 53

Multiple Choice

If a firm is maximizing profit and the marginal revenue product of labor is $10 and the marginal revenue product of capital is $30, then

• A)the marginal resource cost of labor is $3, and the marginal resource cost of capital is $0.33
• B)the marginal resource cost of labor is $0.33, and the marginal resource cost of capital is $3
• C)the marginal resource cost of labor equals the marginal resource cost of capital; both are $300
• D)the marginal resource cost of labor is 1/3 of the marginal resource cost of capital
• E)we have no way of knowing the marginal resource cost of either labor or capital

Grasp the advantages and implications of using different inventory costing methods (LIFO, FIFO) under varying cost conditions.

Learn the application and significance of the lower-of-cost-or-market method for inventory valuation.

Comprehend the concept and calculation of net realizable value in inventory valuation.

Recognize the requirements for including goods in inventory for different scenarios (consignments, goods in transit).

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Definitions:

Experiments

Scientific procedures undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

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The perception of a relationship between two variables when no such relationship actually exists.

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An extended period of academic or scientific research aimed at investigating a specific hypothesis, question, or area of knowledge.