The Relationship Between Labour Usage and Output at the Local

question 6

Multiple Choice

The relationship between labour usage and output at the local Starducks is summarized in the table below.The price of a cup of espresso is $1.25 and no other inputs are required.
-Refer to the information above.The marginal product of the third worker is __________ the marginal product of the second worker,which means that __________.

• A) greater than;diminishing returns are absent
• B) less than;diminishing returns are present
• C) equal to;the third worker will be hired
• D) less than;diminishing returns are absent
• E) greater than;diminishing returns are present

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Definitions:

Pre-acquisition Retained Earnings

The accumulated profits of a company before it was acquired by another entity, which are not included in the calculation of goodwill.

Consolidation Worksheet

A document used in preparing consolidated financial statements that combines the financial data of parent and subsidiary companies.

Revalued Above Cost

When an asset's market value increases beyond its historical cost, leading to an adjustment in the book value.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its identifiable net assets.