The Relationship Between Labour Usage and Output at the Local

question 146

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 benefit to Starducks of hiring the fifth worker is

• A) 5 extra cups of espresso.
• B) 75 total cups of espresso.
• C) $93.75.
• D) $6.25.
• E) unknown.

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Definitions:

Annual Net Cash Flows

The total amount of cash that a company generates or loses over one year, after all expenses and incomes are taken into account.

Depreciated

A reduction in the value of an asset over time, often due to wear and tear or obsolescence, which is accounted for in accounting to spread the cost over its useful life.

Marginal Tax Rate

The marginal tax rate is the rate at which the last dollar of income is taxed, reflecting the rate applied to an individual's or entity's highest level of income.

Marginal Tax Rate

The rate at which the next dollar of taxable income will be taxed.