When the Price of a Firm's Output Increases

question 40

Multiple Choice

When the price of a firm's output increases,

• A)the supply of labour increases.
• B)the firm hires less labour.
• C)the marginal product of labour increases.
• D)the firm's demand for labour curve shifts leftward.
• E)the value of marginal product of labour increases.

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Definitions:

Applied to Production

Costs that are allocated or assigned to goods that are being produced, often involving direct labor, materials, and overhead.

Overapplied

Refers to a situation where the amount of overhead allocated to products or jobs is more than the actual overhead incurred.

Underapplied

Underapplied refers to a situation where the allocated costs are less than the actual costs incurred, often relating to overhead in manufacturing.

Direct Labor-Hours

A measure of the amount of time workers spend on production, often used as a basis for allocating overhead costs in traditional costing systems.